Activist investor Ackman exits J.C. Penney board amid public spat Inc. said activist investor Bill Ackman had resigned from the board, three years after embarking on a public and at times acrimonious campaign to turn around the struggling department store operator and less than a week after demanding the ouster of its chairman and CEO. J.C. Penney's shares, which have lost a third of their value this year, rose as much as 4 per cent in premarket trading after the company named a new director and said it would add another. "At this time, I believe that the addition of two new directors and my stepping down from the board is the most constructive way forward for J.C. Penney and all other parties involved," Ackman said in a statement released by the company on Tuesday. Ackman's Pershing Square Capital Management owns about 18 per cent of J.C. Penney and is the company's biggest shareholder. Ackman started buying Penney shares nearly three years ago to the day, paying between $20.01 (U.S.) and $28.92 each, well above the $13 level they have been trading at in recent days. J.C. Penney said retail industry veteran Ronald Tysoe would join its board and that it would appoint another director soon. Tysoe spent 16 years as vice chairman of Federated Department Stores Inc, now Macy's Inc., and sits on several boards including the Canadian Imperial Bank of Commerce. The public spat between Penney and Ackman escalated late last week when the hedge fund manager demanded the ouster of chairman Thomas Engibous and interim chief executive Myron Ullman. Ackman had demanded that Ullman be replaced within 30 to 45 days. Ullman was CEO from 2004 to 2011, when Ackman helped to oust him. He returned in April after a disastrous stint by Ron Johnson, a former Apple Inc. retail executive who Ackman had picked to turn around the company. But sales fell 25 per cent in 2012, largely because Johnson got rid of the discounting that Penney was famous for. The search for Ullman's eventual successor will continue even with Ackman's departure, a J.C. Penney spokeswoman said. "This outcome is not surprising," said Charles Elson, director of the Center for Corporate Governance at the University of Delaware. Ackman wasn't in a strong position. He was the one who brought in Johnson - he has to own that. Tysoe's nomination was meant to fill a vacancy following the death of Burl Osborne, a J.C. Penney spokeswoman said, noting that this would bring the size of the board back up to 11. Retail analyst Walter Loeb said Ackman's presence on the board had been disruptive. "He caused so much uncertainty in the company," said Loeb, of Loeb Associates. Tysoe is well regarded in the retail industry and will bring a calm, measured company... Ackman's resignation may be a victory in short term for Ullman and the board but will give Pershing Square more latitude to begin selling its stake in the company. Ackman, however, may not be able to sell his shares immediately as he was privy to material information as a member of the board. It also remains to be seen what other large investors do if Ullman remains at helm for an extended time. So far, the other large investors have held off on making changes to their holdings. Soros Fund Management LLC, backed by billionaire financier George Soros, is holding on to its 7.9 per cent stake in Penney, a source familiar with the matter said on Monday. Another large Penney investor, Glenview Capital Management, also appears to be sitting tight on its "passive" 4 per cent stake in the retailer. A person familiar with the hedge fund led by Larry Robbins said on Monday that the firm had not taken any sides in the public dispute between Ackman and Penney's board. Penney will release second-quarter results next Tuesday. "The second-quarter results won't be good but that's not Ullman's doing, it's Johnson's," said Loeb.