JC Penney looking to raise $810.6M from offering

[September 28, 2013]  PLANO, Texas (AP) -- J.C. Penney, the struggling retailer that is trying to reassure the market about its financial stability, expects to raise about $810.6 million via a public stock offering.

J.C. Penney said Friday it plans to offer 84 million shares priced at $9.65 per share. That is a 7.3 percent discount to Thursday's closing price of $10.42 per share.

The Plano, Texas company could raise more than that if the underwriters exercise in full a 30-day option to buy up to an additional 12.6 million shares.

Its stock dropped more than 6 in premarket trading Friday.

The offering is expected to close on Tuesday.

J.C. Penney Co. also disclosed in a regulatory filing that it anticipates having about $1.3 billion in cash or assets that can readily be converted to cash at year's end. That excludes the net proceeds from the offering.

J.C. Penney is trying to recover from a failed turnaround attempt spearheaded by its former CEO Ron Johnson that led to disastrous results. Its board ousted Johnson in April after 17 months on the job and rehired Mike Ullman, who had been CEO of the retailer from 2004 to late 2011. Under Ullman, J.C. Penney is bringing back sales events that had been ditched and restoring basic merchandise like khakis that were eliminated by Johnson.

The retailer, which has seen its shares in a free fall in recent days, on Thursday sought to appease investors who were worried about its cash liquidity and sales following a gloomy analyst report on the company. The department store chain released a statement Thursday morning that it was pleased with its turnaround efforts. CNBC also quoted Ullman as saying that he doesn't see conditions this year where "we'd need to raise liquidity."

The stock dropped as low as $9.52 on Thursday, its lowest point in almost 13 years. Its shares fell 65 cents, or 6.2 percent, to $9.77 in premarket trading Friday.

[Associated Press]

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