An interesting tidbit from Pershing Square's just released quarterly letter discussing JCPenney:
When we first announced our stake in JCP, the stock price increased to the low $30s per share. Shortly after announcing our stake, we were approached by one of the most well-respected private equity funds in the world who expressed an interest in acquiring the company at a substantial premium. While we welcomed this fund as an owner of the stock, we had no interest in selling the company for a quick premium because we believe in the long-term value creation opportunity.
Now before anyone rushes out and buys the company on takeover interest, it is worth noting that Ackman first got into JCP back in Q3 of 2010.
Below is the history of Pershing Square's holdings in JCP:
Quite a bit has changed since Q3 2010. More importantly, if a PE firm liked it at $30 (and assuming the traditional 25% LBO premium, that means more likely $40) it likely would have liked it much lower, where it is now. And yet... Nothing so far.
Incidentally, a potential LBO bid has long been an upside catalyst in the name (think RSH). If anything, this likely means one less suitor out there, or at least the access to debt financing component of an LBO is far harder now than back in 2010, especially when it comes to retail companies.
Full Ackman letter.