The hedge fund manager William A. Ackman had bet on Ron Johnson as the man to revive the fortunes of J.C. Penney. But on Monday the embattled retailer ousted Mr. Johnson, its chief executive of 17 months, going back to the previous C.E.O., Myron E. Ullman III.
The replacement is a “curious move,†Stephanie Clifford writes in The New York Times. “It was dissatisfaction with where Mr. Ullman was taking the company that led Mr. Ackman to look for another leader in the first place.†But Mr. Johnson, who had engineered Apple’s retail strategy, oversaw a 52 percent drop in J.C. Penney’s stock price, as his new ideas failed to improve profit. After publicly supporting Mr. Johnson since he became chief executive in 2011, Mr. Ackman seemed to withdraw support on Friday.
Mr. Ullman was in charge when Mr. Ackman’s hedge fund, Pershing Square Capital Management, and Vornado Realty Trust suddenly emerged as large shareholders in 2010, DealBook’s Michael J. de la Merced writes. Though Mr. Ullman was surprised by the move back then, he began briefing the investors and eventually gave them board seats.
In an interview with The Times, Mr. Ullman said it was premature to say which of Mr. Johnson’s efforts he would continue. “Some things are working well, others maybe not, but I deserve a chance to be on the ground.†He said he received a call this weekend from J.C. Penney’s chairman, Thomas Engibous, asking him if he would consider returning. That was the first he had heard of it, but his answer was “absolutely,†he said.
BATTLING OVER TROUBLED ENERGY BUYOUT  | The private equity owners of Energy Future Holdings, which was purchased for $45 billion in 2007, “are trying to make sure they don’t walk away empty-handed†from the increasingly troubled deal, Julie Creswell reports in The New York Times. The company, whose buyout still ranks as the biggest ever, may be able to put only part of the business, the retail energy and power-generation operations, into bankruptcy while holding on to a safer division, analysts say. “Still, as much as Energy Future Holdings may want to tie a reorganization into a neat little bow, some creditors, including seasoned hedge fund investors in distressed debt, are certain to make this a fight of junkyard dogs,†Ms. Creswell writes.
“Those investors have amassed big chunks of the senior debt of the segment of Energy Future Holdings that houses the retail and power-generation business. The loans, which currently trade around 70 cents on the dollar, put the investors first in line to convert their debt into equity in a restructuring of the power-generation assets.†Some hedge funds are “hoping to force a default†and put the company in bankruptcy, said Andrew DeVries, an analyst with the research firm CreditSights.
WHITE CONFIRMED AS S.E.C. HEAD  | Mary Jo White overcame concerns about her close ties to Wall Street banks, as the Senate confirmed her on Monday as the new leader of the Securities and Exchange Commission. Ms. White, a former federal prosecutor who went on to defend clients like JPMorgan Chase, is expected to join the agency in the coming days, replacing Elisse B. Walter. “The agency is under pressure from Congress to complete new rules for Wall Street and take aim at financial fraud,†Ben Protess writes in DealBook. “It also must confront the growing world of high-frequency trading, a business that continues to confound the agency, and money market funds, which the S.E.C. is seeking to rein in.â€
ON THE AGENDA Â |Â The City Council of Oakland, Calif., votes at 12:30 p.m. on whether to continue doing business with Goldman Sachs, after the firm refused to drop a fee to let the city out of an interest rate deal. Bill Gross of Pimco is set to auction off some items from his collection of rare United States stamps. Scott Sperling of THL Partners is on CNBC at 7:15 a.m.
THATCHER’S LEGACY IN EUROPE  | Margaret Thatcher, who died on Monday at 87, had doubts about a “European superstate†that resonate today, nearly a quarter century after she left office as prime minister, The New York Times writes. “She correctly predicted in her memoirs that Germany’s historical fears about inflation would lead to slow-growth policies that would deepen the problems of the euro zone’s weaker, less efficient economies, which could no longer rely on devaluation to solve their problems.â€
“Mrs. Thatcher’s prescription for Britain in the 1980s â€" faith in market forces, willingness to impose short-term austerity in the service of long-term prosperity, and skepticism or even hostility to the fiscal and social costs of the welfare state â€" prefigured some of the policies Germany and European regulators are still recommending, wrongly in the view of many economists, for the struggling Southern European countries.â€
G.E. to Buy Lufkin Industries for $3.3 Billion  | The deal is the latest by General Electric’s oil and natural gas unit, one of the fastest-growing parts of the conglomerate. DealBook »
With Lufkin Deal, G.E. Continues to Plumb the Oil Patch  | With its $3.3 billion takeover of Lufkin Industries, General Electric is bolstering its presence in the drilling services sector. DealBook »
Not So Pumped Up About G.E.’s Latest Deal  | Lufkin Industries, whose technology helps increase production for aging oil wells, is a strong player in a growing sector. But G.E.’s previous deals did little for margins, and the latest acquisition doesn’t come cheap, Christopher Swann of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Lagardere Says It Sold EADS Stake for $2.97 Billion  |Â
REUTERS
Occidental Board to Defend Search for New Chief  | The oil producer Occidental said its directors unanimously supported the plan to find a successor to its chief executive, Stephen Chazen, amid reports of discord within the board. DealBook »
Exchanges Are Moving to Curb Private Trades  | The chief executives of the three largest stock exchanges are joining forces for the first time to push regulators to rein in the increasing amount of trading that is moving off public exchanges and onto platforms like so-called dark pools. DealBook »
State-Run Banks in Russia Gain Market Share  | Investment banks controlled by the Russian government “are squeezing out foreign competitors, helped by a bailout of the country’s richest men five years ago,†Bloomberg News reports. BLOOMBERG NEWS
JPMorgan’s Dimon Buys Another Apartment in His Building  |Â
THE REAL DEAL
Bernanke Says Stress Tests Show Healthier Banks  | In a speech on Monday, Ben S. Bernanke, the Federal Reserve chairman, discussed the importance of the central bank’s recent stress tests, saying they had improved since the financial crisis, and that they showed banks growing healthier. ASSOCIATED PRESS
Bank of America Executive in Asia Departs  | Ashish Malhotra, who recently was promoted to head of debt capital markets for Asia, has left Bank of America Merrill Lynch, according to The Wall Street Journal. WALL STREET JOURNAL
In Sydney, Barclays Hires Former Citigroup Executive  |Â
WALL STREET JOURNAL
THL to Buy CompuCom, a Technology Services Firm  | THL Partners agreed on Monday to buy CompuCom Systems, a privately held information technology consultancy. The deal values CompuCom at about $1.1 billion, according to a person briefed on the matter. DealBook »
Carlyle Group Reports Quarterly Gains in Its Funds  |Â
BLOOMBERG NEWS
Hedge Funds Gained Modestly in March  | A broad index of hedge funds rose 0.92 percent in March, but many equity funds in the United States trailed stocks, according to Absolute Return. ABSOLUTE RETURN
SeaWorld Aims to Raise $500 Million in I.P.O. Â |Â
REUTERS
Citigroup Said to Be Seeking Recovery of Facebook Losses  | Citigroup plans to file a claim seeking compensation from Nasdaq over trading losses in Facebook’s debut last year, The Wall Street Journal reports, citing unidentified people close to the discussions. WALL STREET JOURNAL
Start-Up Helps Teachers Know if You’ve Done the Reading  | Professors at Texas A&M are beginning to use technology from a Silicon Valley start-up, CourseSmart, allowing them to measure how diligently their students are reading digital textbooks, The New York Times reports. NEW YORK TIMES
Clean Power Finance Raises $37 Million  | Clean Power Finance, an online platform that provides software and financial services to solar professionals and investors, has raised a fresh $37 million, in a sign that enthusiasm for the solar sector has not dimmed entirely. DealBook »
KPMG Says It Fired Partner Over Insider Trading  | The audit firm KPMG said it had fired a senior partner in Los Angeles after discovering that he had given inside information to someone “who then used that information in stock trades involving several West Coast companies,†The New York Times reports. NEW YORK TIMES
A.I.G. Seeks to Bar Greenberg From Suing U.S. on Its Behalf  | A.I.G. has formally requested that its former chief executive, Maurice Greenberg, be barred from suing the federal government on the insurer’s behalf, after the company decided not to join his lawsuit. DealBook »
Volcker Warns Over ‘Unorthodox’ Monetary Policy  | Paul A. Volcker, a former Federal Reserve chairman, said on Monday that central banks around the world, including the Fed, could eventually do harm with their economic stimulus efforts. CNNMONEY
Fisker Automotive Prepares to File for Bankruptcy  |Â
WALL STREET JOURNAL
In Europe, a Fresh Antitrust Protest Over Google  | A group of Google’s competitors filed a complaint in Europe over Google’s Android operating system. NEW YORK TIMES
The Fine Line Between Political Intelligence and Insider Trading  | The imprecise rules governing insider trading are an ineffective means to regulate how political intelligence firms operate, Peter J. Henning writes in the White Collar Watch column. White Collar Watch »
New Firm Plans to Invest in Lawsuits  | Gerchen Keller Capital has raised $100 million to invest in high-stakes litigation between companies, becoming the latest investment firm to dive into the relatively new sector. DealBook »
Japan’s Monetary Effort Has Global Ramifications  | The New York Times reports: “The Bank of Japan’s new antideflation policy made waves throughout the global financial system on Monday, driving down the yen and lifting share prices in Tokyo, but economists said the effect had yet to be fully felt overseas.†NEW YORK TIMES
