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Ackman, beaten, sets exit terms for Penney stake

NEW YORK J.C. Penney Co. (JCP) and its largest shareholder and former board member William Ackman have made a deal that sets terms for allowing him to unload his stake in the company.

The agreement, filed with the Securities and Exchange Commission Friday, comes three days after Ackman resigned from Penney's board as part of a deal to resolve an unusually public battle between the activist investor and the struggling department store.

Ackman's Pershing Square Capital Management has 17.7 percent stake in Penney.

Under the deal, Ackman can make up to four requests to the company to register the sale of his shares. The agreement terminates when he owns less than 5 percent of the company's stock.

Penney's stock fell 45 cents, or 3 percent, to $13.38 in morning trading.

Ackman has not been having a good year. He took a negative position on nutritional supplement company Herbalife, only to see other top investors, most notably Carl Icahn and George Soros, go long. So far they have been vindicated, and Ackman's position has led to large losses.

Ackman successfuly pushed for the installation of former Apple executive Ron Johnson as CEO of Penney, only to see Johnson ousted after only 17 months on the job, after his radical makeover of the chain failed to boost results. Ackman's latest push to quickly find a new CEO was met with open hostility by Penney's board as well as other investors, leading to his resignation from the board.