Report: Ackman backing down in latest Penney drama

New York -- Activist investor Bill Ackman of Pershing Square Capital Management plans to abandon his push for a quick replacement to J. C. Penney CEO Mike Ullman, according to the New York Post. The report says that it now appears that Penney will proceed with a more deliberately paced search for a replacement for Myron Ullman, who assumed the role of interim CEO in April in the wake of Ron Johnson's firing.   

Ackman, Penney’s largest shareholder, has been engaging in a war of words with Ullman and the company’s other board members. He publicly criticized the board, seeking the ouster not only of Ullman but also of Penney chairman Thomas Engibous.

"I have lost confidence in our chairman's ability to oversee this board," Ackman said in an open three-page letter he sent to the board on Friday. "Penney is at a very critical stage in its history and its very existence is at risk. In recent weeks, our board has ceased to function effectively."

On Friday afternoon, hedge fund Perry Capital, which owns 7.3% of Penney, expressed support for Ackman's strategy and urged the company to immediately seek to replace Ullman with veteran retailer Allen Questrom and Engibous with Ken Hicks.

Penney responded, and called Ackman's statements "misleading, inaccurate and counterproductive."

"The board ... is following proper governance procedures, and members of the board have been fully informed and are making decisions as a group. This includes the CEO search process, which is being conducted at an appropriate pace," said Engibous, in a statement.