Activist investor William Ackman has released a new letter today, outlining some back-and-forth over the search for a new CEO at J.C. Penney (NYSE: JCP ) and calling for Thomas Engibous to be replaced as chairman of the board.
Ackman is suggesting former CEO Allen Questrom to replace Engibous. Questrom said Thursday he would rejoin the company but not under a hostile board situation and only if he agreed with the choice of the next CEO.
Ackman's latest letter -- some 2,500 words addressed to his fellow board members -- follows a press release issued by JCP on Thursday evening containing a statement by Engibous "on behalf of the board of directors."
The Thursday evening statement expressed displeasure with Ackman, a hedge fund manager and a J.C. Penney Director who earlier Thursday had released a letter expressing his impatience with a search for a new CEO. Ackman indicated a vetting of candidates could be completed in 30-45 days.
Speaking on behalf of the Board, Engibous shot back in the company's press release: "Mr. Ackman has been integrally involved in the Board's activities since he joined two years ago. This includes leading a campaign to appoint the Company's previous CEO, under whose leadership performance deteriorated precipitously. His latest actions are disruptive and counterproductive at an important stage in the Company's recovery."
Engibous went on to praise current CEO Myron E. "Mike" Ullman, who had been Penney's CEO from 2004 to 2011, when he stepped aside to make way for Ron Johnson. Ullman returned to the position four months ago to replace Johnson. Engibous said Ullman has helped correct the errors of previous management and helped "return the Company to sustainable, profitable growth." He said Ullman has improved the company's financial position, brought back inventory to "appropriate" levels, and reintegrated the online business with stores.
"Mike is the right person to rebuild jcpenney by stabilizing its operations, restoring confidence among our vendors, and getting customers back in our stores. He has the overwhelming support of the Board of Directors, and we are confident the Company is in good hands," said Engibous.
He said the CEO search process began "in earnest" three weeks ago.
The Wall Street Journal says Ackman owns 17.7% of J.C. Penney's stock outright and has derivative exposure equaling another 7.3% to the company.
In his letter today, Ackman said the JCP board "has ceased to function effectively. Material information is not being properly shared with the board, and the board does not have access to independent advice."
-- Material from The Associated Press was used in this report.