Ackman Sends Scathing Letter to J.C. Penney Board

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August 9 (Bloomberg) -- Bloomberg’s Stephanie Ruhle reports on a public letter to the J.C. Penney board from Bill Ackman and the strong wording directed at the ‘board within the board’. She speaks on Bloomberg Television's “Market Makers.”

-- you are on the phone.

This is a letter that will be published on bloomberg shortly.

Bill ackman sent a letter to the company, and he said of my 15 years sitting on a robert board i never sent a public letter.

Basically he is exasperated.

He is saying we are no longer functioning as a unified board.

It really seems, based on the tone of his letter, that there is a board within a board.

Interim ceo mikeullman, though bill was in support bringing them in, seems as if he has gone somewhatrogue.

The nashville is the largest shareholder and based on this letter he says he just does not want to know what is happening inside the company.

When mike became ceo he terminated alix partners and cut off blackstone from access to information, and those two firms were analyzing the overall country -- company.

They went on to hire someone they knew from craft -- kraft . he learned about the marketing higher reading it on his bloomberg terminal.

He said an order for the company to work, the board has to be fully informed, and right now it is not the case.

As i mentioned, he feels there is a board within a board.

As the larger shareholder, he feels like the only option, because he is banging his head against the wall, is to, publicly and say we don't have time to kind of pussyfoot around.

Clearly, if the advisors that are currently advising mike ullman have come in, they will not choose to terminate him, they are "his boys." it needs to be a unified board where people can speak clearly and in the hiring process everyone needs to be vetted clearly.

Hang on one second -- those are mike's guys.

How can a board truly evaluate things fairly when the ceo himself brings them in?

I actually just myself had a chance to read through this letter and jump to the bottom to see what his final blow would be.

He says -- "i have lost confidence in our chairman's ability to oversee this board.

I would therefore recommend tom be replaced." this is war.

This is major.

Right now, jcpenney needs to be moving in one direction.

As we spoke to bill earlier this year, we were looking or big days like mother's day, when they were releasing their new home store.

And the company is just not growing in the same direction.

If they are not growing in the same direction, how can they possibly win against their competitors?

They can't. bill sounds like he is in a desperate situation dealing with the board.

He wants to get this company in line.

He has to get management in line.

That is what he has to do here.

He has one problem, he doesn't control his company and as such doesn't control the board.

It seems to me he is almost left with few choices but to wage his battle with tom and who we he would perceive to be a rogue group of directors in public.

Has only choice -- if he does not control the company.

Erik, he needs to get the public, other shareholders behind him to see what is going on is that the board.

If you are not chairman of the finance committee and not the larger shareholder but simply a jcpenney shareholder in general, you don't have privilege to this kind of information, so bill has not week that publicly before, as i said, in the 15 years he sat on boards.

At this point, he feels like he needs to because other people need to know they are not moving in the same direction.

If this company has a chance, we need to.

Some of the question ultimately, though, is, on whose side are the other investors?

They are mindful of the fact that jcpenney's shares are doing terribly.

They clearly want to turn around a company.

Who are they going to side with?

Are they going to side with bill ackman or the chairman, who at the time -- time seems to support mike ullman.

And the question is, how much time?

The company chugging along the in and out.

We are at back-to-school shopping where target and kohl's are selling merchandise.

Is jcpenney doing it?

As they are having a fight, what is the company doing?

Is there enough time and cash to keep the company afloat while this is happening?

Unclear at this point.

Bill seems like -- i do not want to say his back is against a wall in a bad way.

His back is against the wall.

He has to take the control he's got to try to get consensus behind him.

That's the if it works.

Bill ackman, as we know, is not shy of explosive situations.

But in this case, he seems to be throwing dynamite on the fire.

In a war of words and more with a jcpenney.

Our own stephanie ruhle, still on maternity leave, but reporting and bringing us a bloomberg exclusive.

This text has been automatically generated. It may not be 100% accurate.


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