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Billionaire tennis buddies George Soros (above) and Bill Ackman are finding a common investment target: JCPenney, the struggling retail chain. (Reuters)
Hedge-fund tycoon Bill Ackman is scrambling to find a way out of the JCPenney mess, and his longtime pal George Soros has just swooped in to lend a helping hand.
Octogenarian billionaire Soros — a tennis partner of 47-year-old Ackman — surprised Wall Street late yesterday by disclosing a 7.9-percent stake in Penney.
Soros’s investment in the troubled department-store chain caught many off guard as, sources said, the tycoon took back millions of dollars that he had invested in Ackman’s Pershing Square Capital Management fund within the past year.
Reached yesterday, Ackman declined to comment. A spokesman for Soros didn’t respond to requests for comment.
The pair travel in the same circles, sharing offices in the same 888 Seventh Ave. building in Midtown and also donating to the same charities.
Soros’s investment — so close in time to Ackman’s nearing a deal this week with lenders to shore up Penney’s fast-eroding liquidity — wasn’t a coincidence, insiders speculated.
The Ackman deal will pledge company assets as collateral for financing.
“This news in and of itself could help Penney get better terms” on asset-backed loans, a banking source told The Post yesterday.
Penney shares — which have lost more than half their value over the past year — surged 7.3 percent in after-hours trading yesterday, after closing at $15.24, up 5 cents, in regular trading.
Soros, who said in a securities filing he has scooped up 17.4 million shares of the company, doesn’t have a notable track record investing in retailers.
Returns of Soros Funds Management last year lagged major stock indices — as the Wall Street titan battled with an ex-girlfriend over a Manhattan apartment and got engaged to a woman 42 years his junior.
Still, Soros’s Penney investment could give a sorely needed boost to Ackman’s credibility on Wall Street, which took a beating as his hire of Ron Johnson as CEO ended in disaster.
Investors got spooked in March when Vornado CEO and Penney board member Steve Roth abruptly sold nearly half of his 10 percent stake in Penney.
Johnson, a former Apple executive whose strategy to eliminate coupons and discounting spurred a loss of nearly $1 billion last year as sales plunged 25 percent, left the company earlier this month.
Soros appears to have acquired his stake at recent trading prices in the neighborhood of $15 a share — a sharp discount to Ackman’s average cost of around $25, according to sources.
“Soros is doing this not to do someone else a favor, but to make some money,” one investor in Ackman’s fund told The Post, adding that “he can get in and out whenever he wants.”
Indeed, it’s difficult for investors to extract money from Ackman’s fund, which locks up investments for two years.
Others on Wall Street yesterday took Soros’s Penney stake as a signal that the worst is likely over for the retailer’s shareholders. With Johnson gone, Ackman has brought in former CEO Mike Ullman to stabilize the business.
“Soros is a smart investor, and he knows that this company isn’t going bankrupt,” one jubilant Penney shareholder told The Post yesterday.