J.C. Penney Funding Turnaround on $932M Share Sale

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Sept. 27 (Bloomberg) -- Bloomberg senior markets correspondent Julie Hyman reports that J.C. Penney has announced a share offering of $9.65 a share to raise as much as $932 million as part of its turnaround. She speaks on Bloomberg Television’s “In The Loop.”

Of about 7.4% to where they closed yesterday.

The company is selling about 84 million shares, an enormous offering.

Consider the size of jcpenney's slope.

About 220 million shares.

Talking about 38% of its float being offered as new shares pared when you get that kind of offering, you expect share dilution for existing shareholders.

You expect a decline.

That is happening.

Also, people are worried about jcpenney's liquidity.

The committee said that at the end of the year, his liquidity position will be $1.3 billion.

A few months ago it had put that at $1.5 billion.

So it is coming down.


Why did they say they need the money?

They say they do not actually need the money right now.

And analyst says they do not need it until later next year, perhaps the third quarter or even beyond.

The company is putting it at 2015 even.

It is a matter of when it is able to raise this money.

The concern is that if it waits until after the third quarter earnings report, for example, and that report is not strong, most analysts are rejecting a decline in comparable sales of more than 4%, it will be tougher for them to sell shares to the public at that point in time.

Also, it is not clear who will be buying this enormous offering.

Existing shareholders or at new folks?

Julie, thank you for that.

Julie hyman, our senior markets correspondent.

Mcdonald's is continuing to try to shed its image as a purveyor of fatty foods.

It announced yesterday that it will start offering healthier options instead of fries with that big mac.

The ceo had this to say when i asked about the company's future healthy food push.

We think health will be determined by the person who decides to buy it.

I will tell you, yes, more fruits, more vegetables, that is part of our plan.

At the same time, i am going to tell you, at big mac, two all beef patties, it is all real

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


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