Pershing Square - an owner of about 39M shares or 17.7% of J.C. Penney (JCP) - will be allowed up to 4 large sales (at least 5M shares) of company stock, but only after receiving permission from the retailer to do so. J.C. Penney is not obliged to allow more than 2 sales during any 12 month period. Once Pershing's stake drops below 5% it will no longer be bound by these terms.
The agreement signals Ackman's willingness to exit his stake in the company, says Ciit's Deborah Weinswig. Though it appears as if the sales will be orderly and over time, when combined with Vornado's (VNO) apparent intention to sell what left of its stake (6.1%), it could serve as an overhang on the stock.
J.C. Penney reports earnings on Tuesday.
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