Penney hires Goldman for fight with Ackman - report

NEW YORK Wed Oct 13, 2010 11:33am EDT

NEW YORK Oct 13 (Reuters) - J.C. Penney Co Inc (JCP.N) has hired investment bank Goldman Sachs (GS.N) to prepare for a potential fight with activist investor William Ackman, Women's Wear Daily reported on Wednesday, citing sources.

Ackman's Pershing Square Capital said last week it had taken a 16.5 percent stake in the department store chain. He is building an alliance with Vornado Realty Trust, (VNO.N) which on Friday disclosed it held 9.9 percent of Penney's shares.

Ackman, now the retailer's biggest investor, has already told the Plano, Texas-based company that he plans to look hard at its assets and financial condition.

Penney Chief Executive Myron Ullman is planning to meet with Ackman and Vornado chairman Steven Roth within two weeks, Women's Wear Daily reported, citing a source.

Know for his savvy in making real estate bets, Ackman said at a conference on Tuesday that Penney has a "better real estate" portfolio than some competitors like Macy's Inc. (M.N). Penney owns about 416 of the 1,108 department stores it operates and Vornado is a major landlord.

Ackman first started buying Penney shares on Aug. 17 for $20.01. Shares have risen 69.8 percent since then.

Penney shares were trading for $33.20 in late morning trading on Wednesday.

Representatives for both Penney and Goldman declined to comment. (Reporting by Phil Wahba; Editing by Derek Caney)

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