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April 26 (Bloomberg) -- J.C. Penney Co., the department-store chain working to rebound from its worst sales year in more than two decades, rose after billionaire George Soros disclosed a passive stake. The retailer also advanced on a report that it had secured a loan from Goldman Sachs Group Inc.

Soros Fund Management LLC’s stake is equal to 7.9 percent of J.C. Penney, according to a filing yesterday. The investment makes him the fourth-largest shareholder, according to data compiled by Bloomberg. Separately, CNBC reported that J.C. Penney has a $1.75 billion loan committment from Goldman Sachs.

J.C. Penney is trying to rebound from a 25 percent drop in sales and a net loss of $985 million last year under the leadership of Ron Johnson, who was replaced as chief executive officer by Myron Ullman earlier this month. Ullman, who left the CEO role in 2011 for Johnson, has already tapped the company’s credit line and is seeking to raise more cash.

The shares rose 12 percent to $17 at the closee in New York, the biggest one-day gain since January 2012. J.C. Penney, based in Plano, Texas, declined 14 percent this year, compared with an 11 percent gain for the Standard & Poor’s 500 Index.

Joey Thomas, a spokesman for J.C. Penney, declined to comment on the CNBC report as well as the Soros investment.

Soros is joining hedge fund manager Bill Ackman in investing in the retailer. Ackman is J.C. Penney’s largest shareholder with his Pershing Square Capital Management LP owning about 18 percent of the shares outstanding. At one point earlier this month, Ackman’s losses on his J.C. Penney stake, which he disclosed in 2010, had surpassed $650 million.

Soros Investments

Soros is the legendary hedge-fund manager best known for a 1992 bet that the Bank of England would be forced to devalue the pound. He and then-chief strategist Stan Druckenmiller’s $10 billion wager netted $1 billion for Soros. He is now chairman of New York-based Soros Fund Management, his former hedge fund that became a family office in 2011. The office oversees $24 billion for Soros, his family and foundations.

The stake in J.C. Penney marks the fund’s third-largest investment, behind holdings in Citigroup Inc. and American International Group, according to fourth-quarter data compiled by Bloomberg. It also has smaller investments in retailers such as Wal-Mart Stores Inc. and Costco Wholesale Corp.

Michael Vachon, a spokesman for Soros, declined to comment.

Ullman borrowed $850 million from J.C. Penney’s $1.85 billion revolving credit line this month, a week after replacing Johnson as CEO. Blackstone Group LP is helping J.C. Penney raise at least $1 billion, people familiar with the situation have said.

To contact the reporter on this story: James Callan in New York at

To contact the editor responsible for this story: Robin Ajello at

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