Activist investor Bill Ackman said in his Q1 letter to investors dated June 12, 2012 that shortly after Pershing Square disclosed its stake in JCPenney the hedge fund was approached by a private equity firm to buyout the retailer for a premium.
From the letter:
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.
We also believe that public market investors benefit by being able to participate in the value created from a business transformation, rather than being forced to sell out. While there will likely continue to be a high degree of stock price volatility during the course of our JCP transformation, we believe that long-term investors will benefit greatly from the outcome.
Shares of JCPenney closed up 0.71%, or 17 cents, to end at $24.17 a share. The stock was last trading up about 1.99% in after-hours trading.