Penney drops

24 January 2011 By Lisa Lee

The department store chain wisely agreed to give board seats to agitators Bill Ackman and Vornado’s Steven Roth. The move sidesteps a potentially distracting proxy battle for now. But if Penney can’t show improvement quickly, the activists probably won’t stay quiet for long.

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Department store operator J.C. Penney on Jan. 24 said it would add investors William Ackman, who runs Pershing Square Capital Management, and Steven Roth, chairman of Vornado Realty Trust, to its board. The number of directors is expanding from 11 to 13, and another member will be added soon.

The two investors disclosed a combined stake of 26 percent in J.C. Penney last October. The company responded by implementing a poison pill provision.

J.C. Penney also said it would sell five stores and wind down its catalog business.

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