By Tiernan Ray
Bill Ackman‘s struggle to revive J.C. Penny (JCP) takes a new turn this morning, as the Pershing Square hedge fund manager, Penney’s largest shareholder, issued an open letter to the board of directors of the retailer, calling for chairman Tom Engibous to step down, saying the functioning of the board had broken down amidst an urgent need to find a new chief executive officer.
“I have lost confidence in our Chairman’s ability to oversee this board,” writes Ackman. “I would therefore recommend that Tom be replaced as our Chairman.”
Ackman proposes former CEO Allen Questrom, who yesterday told CNBC he would be willing to come back to the company to try and help out, providing he and the board felt comfortable with one another.
In his long, letter, Ackman says he has never before released a letter to the press while serving on a board, but that he was pushed to take the “extraordinary step” given his concern “a small subset of the board is negotiating and speaking on behalf of the full board.”
This morning’s statement follows yesterday afternoon’s announcement by Engibous and the board that it was disappointed with Ackman’s having told the media yesterday that the board wasn’t moving fast enough to find a new CEO.
CNBC’s Scott Wapner reported a short while ago that “According to a source close to J.C. Penney, Ackman’s facts laid out in his letter are inaccurate.” The source said Ackman’s characterization of chair Engibous having gone rogue, or of a small group of board members having split off, are wrong. “The board discussed the matter” of picking a new CEO “as a full board.”
Penney shares are down 79 cents, or almost 6%, at $12.87.