JCPenney (JCP) Shares Rise as Ackman Discloses Swaps, Now Shows Economic Exposure of 55M Shares
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In an amended 13D filing from Bill Ackman's Pershing Square on JCPenney (NYSE: JCP), the fund disclosed additional economic exposure to approximately 16,571,839 notional shares of Common Stock under certain cash-settled total return swaps, bringing their total aggregate economic exposure to 55,647,610 shares of Common Stock, representing approximately 26.1% of the outstanding shares of Common Stock of the Issuer.
Under the terms of the Swaps, (i) certain of the Pershing Square Funds will be obligated to pay to the bank counterparty any negative price performance of the 15,969,239 notional number of shares of Common Stock subject to the Swaps as of the expiration date of such Swaps, plus interest rates set forth in the applicable contracts, and (ii) the bank counterparty will be obligated to pay certain of the Pershing Square Funds any positive price performance of the 15,969,239 notional shares of Common Stock subject to the Swaps as of the expiration date of the Swaps. Any dividends received by the bank counterparty on such notional shares of Common Stock during the term of the Swaps will be paid to the Pershing Square Fund. All balances will be settled in cash. The Pershing Square Funds’ counterparties for the Swaps and other previously purchased and exercised over-the-counter options include entities related to Credit Suisse, Société Génerale and UBS.
From a filing earlier this month, Pershing Square showed a total of about 39 million shares.
The stock has ticked into positive territory following the filing.
Under the terms of the Swaps, (i) certain of the Pershing Square Funds will be obligated to pay to the bank counterparty any negative price performance of the 15,969,239 notional number of shares of Common Stock subject to the Swaps as of the expiration date of such Swaps, plus interest rates set forth in the applicable contracts, and (ii) the bank counterparty will be obligated to pay certain of the Pershing Square Funds any positive price performance of the 15,969,239 notional shares of Common Stock subject to the Swaps as of the expiration date of the Swaps. Any dividends received by the bank counterparty on such notional shares of Common Stock during the term of the Swaps will be paid to the Pershing Square Fund. All balances will be settled in cash. The Pershing Square Funds’ counterparties for the Swaps and other previously purchased and exercised over-the-counter options include entities related to Credit Suisse, Société Génerale and UBS.
From a filing earlier this month, Pershing Square showed a total of about 39 million shares.
The stock has ticked into positive territory following the filing.
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