Business

He’s outta here: JCP moves to restore order after Ackman splits

JCPenney’s boardroom brawl is over, and Bill Ackman has staggered out the door.

The activist investor resigned from the flailing department store chain’s board of directors late Monday after picking an unusually public fight last week as he called for the quick ouster of CEO Mike Ullman.

Penney said yesterday that chairman Thomas Engibous and Ullman — who was called in April to replace former CEO Ron Johnson, after being unseated as CEO to make way for Johnson in 2011 — have the “overwhelming” support of the remaining board members.

Penney said it has appointed Ronald Tysoe, a former exec at Macy’s predecessor Federated Department Stores, to fill Ackman’s seat and that it will announce an additional director in the future.

News that Ackman was giving up his quest to oust Ullman was first reported Monday on nypost.com.

Confirming The Post’s report, Ackman he has no plans to sell his Penney shares, though sources said he had threatened to do so in a testy board meeting last month as he demanded the exit of Ullman.

In a statement, Ackman said stepping down is the most constructive way forward for the company.

Penney shares dropped 3.7 percent on the news, closing at $12.68.

Ackman’s decision to leave the board came as a surprise to some insiders. The New York hedge-fund billionaire appears to have gone back-and-forth on the idea after floating it to the board Sunday, sources said.

“It’s not an ideal situation, and [Ackman] saw reasons to stick it out,” a source said. “If things go badly now, he’ll be blamed for leaving [Penney] for dead. If they go well, people will say, ‘See? They just had to get rid of Ackman.’ ”

By leaving the board but remaining Penney’s biggest shareholder with an 18 percent stake in the company, Ackman has found “a middle way,” according to the source. The stake has saddled him with more than $700 million in losses.

In two letters to the board that Ackman made public last week, the hedge-fund billionaire declared that the board had become dysfunctional as it cut him off from the retailer’s financial information. He raised alarms about fast-dwindling cash and said a pair of recent internal business forecasts were slashed by Ullman.

Ackman’s isolation, according to a source, appeared to be a thorny issue without an easy solution as his fellow directors dug in against him, spurring Ackman’s decision to step down.

“Things got so nasty, he apparently decided he didn’t have that much to lose” by leaving the board, one insider said.

Ackman had lately lobbied to replace Ullman with Foot Locker CEO Ken Hicks, who had served for several years as a top Penney exec until 2009.

Likewise, Ackman had pushed to replace Engibous as chairman with Allen Questrom, the legendary merchant who helped Penney out of a fix as its CEO a decade ago.

Questrom said he would consider becoming chairman under the right conditions.