Penney allows Vornado to raise stake to 15.4 pct

[September 20, 2011]  NEW YORK (AP) -- J.C. Penney Co. said late Monday in a regulatory filing that Vornado Realty Trust will be allowed to increase its stake in the company to as much as 15.4 percent.

The move comes almost a year after the department store chain adopted a "poison-pill" in an effort to ward off hostile takeovers. The tactic can result in more shares being issued by the target company, resulting in a higher takeover price.

Last October, Vornado had announced in a regulatory filing that it had a 9.9 percent stake in J.C. Penney. At the same time, Pershing Square Capital Management disclosed a stake of nearly 17 percent.

After enacting the shareholders' right agreement, or poison pill, in October 2010, the department store chain made an about face this past January by agreeing to elect both William Ackman, head of Pershing Square, and Steven Roth, chairman of Vornado, as directors of its board.

In August, Penney, based in Plano, Texas, announced that Pershing Square would be allowed to increase its stake in the company to 26.1 percent. The deal also called for Pershing's voting shares to be cut to 15 percent from 18.3 percent.

J.C. Penney shares fell 56 cents, or 2 percent, to close at $27.44 before the SEC filing. In aftermarket trading, the stock rose 14 cents to $27.58.

[Associated Press]

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