By Dow Jones Business News, September 13, 2013, 05:03:00 PM EDT
--Roth departure comes soon after Ackman's
--Vornado plans to exit from stake, after selling large chunk earlier this year
--Penney's shares down
(Adds information on Penney's separate filing and other details.)
By Ben Fox Rubin
Steven Roth, chief executive of Vornado Realty Trust ( VNO ), stepped down from J.C. Penney Co.'s ( JCP ) board Friday,
becoming the second big investor to leave the struggling department-store operator's board in recent weeks.
In a filing with the Securities and Exchange Commission, Vornado said it intends to review its investments in Penney,
noting at a recent conference Vornado Chief Administrative Officer Joseph Macnow said his company expects to exit from
its investment "in the not-too-distant future." Vornado said it has a 6.1% stake in Penney.
Mr. Roth's resignation comes a few weeks after hedge-fund manager Bill Ackman stepped down from Penney's board amid a
disagreement about its direction and soon after opted to sell his nearly 18% stake in the company. His failed bet on the
retailer cost his fund, Pershing Square Capital Management LP, more than $600 million.
In a separate filing, J.C. Penney said: "Mr. Roth's decision was not the result of any disagreement with the company
or the board of directors."
Mr. Roth and Mr. Ackman joined Penney's board in February 2011 after they disclosed in late 2010 that they amassed a
27% holding in the retailer.
Mr. Roth faced some opposition this year from a proxy firm that recommended shareholders oppose his re-election to the
board. Vornado sharply reduced its stake in Penney in March, selling $160 million worth of the stock at a heavy loss.
The retailer has seen its stock tumble after former CEO Ron Johnson had a dismal run as chief executive, as his plans
to do away with discounts and overhaul the chain's inventory produced a $1 billion loss and a 25% drop in sales in his
first full year on the job. Since Mr. Johnson's firing in April, Myron "Mike" Ullman was brought back to the corner
office to try stabilizing sales.
After Mr. Ackman said he may exit his stake in the retailer, Penney's board last month adopted a shareholder rights
plan, also known as a poison pill, which is designed to dilute the value of a stock by flooding the market with
additional shares, making it expensive for an investor to acquire a controlling stake. The poison pill is in effect for
Other new investors have taken stakes in the retailer, including George Soros, hedge fund Perry Capital and hedge-fund
manager Kyle Bass, of Hayman Capital Management L.P.
Penney's shares closed Friday at $13.82, down nine cents. The stock is down 30% so far this year.
Write to Ben Fox Rubin at firstname.lastname@example.org
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