J.C. Penney Co. investor Perry Corp. cut its investment in the struggling retailer by almost half as the department-store chain seeks to raise capital.
Perry now owns 10 million shares of J.C. Penney, amounting to a 3.3 percent stake, the New York-based firm said today in a filing with the U.S. Securities and Exchange Commission. It held 19 million shares as of Aug. 30, which at the time was an 8.6 percent stake.
Perry announced its investment in J.C. Penney on Aug. 9, backing activist and director Bill Ackman’s efforts to oust Chairman Tom Engibous and Chief Executive Officer Mike Ullman. The rest of the board stood its ground, saying Ullman is the right CEO to revive the company. Ackman agreed to quit the board after the public clash, and later his Pershing Square Capital Management LP sold its entire stake for a $500 million loss.
Perry has lost about $40.7 million since Aug. 9 on the 10 million shares he still holds.
Ullman has been working with Goldman Sachs Group Inc. on a share offering to raise as much as $932 million, before underwriting discounts. That would help J.C. Penney get through the holiday season and fund its attempt to rebound from Ullman’s predecessor’s failed attempt to transform the retailer. The sale will dilute current shares by about 30 percent, Michael Binetti, an analyst at UBS AG in New York, said last week.
J.C. Penney, based in Plano, Texas, fell 0.5 percent to $8.76 in extended trading at 7:11 p.m. New York time. The shares have slid 55 percent this year, compared with an 18 percent gain for the Standard & Poor’s 500 Index.