IBJNews

J.C. Penney sells Simon Property stake for $248M

Back to TopCommentsE-mailPrintBookmark and Share

J.C. Penney Co. said Monday that it is selling the bulk of its interest in mall developer Simon Property Group Inc. for $248 million as it focuses on its core business.

The Plano, Texas, company said the sale announced Monday was the first step in a plan, put in place last year, to sell off assets that don't make up the crux of its department store business. J.C. Penney also said the move bolstered its balance sheet.

Under a new CEO, former Apple Inc. executive Ron Johnson, J.C. Penney is overhauling every aspect of its business from its pricing to the brands it carries. But some investors have concerns about the company's ability to turn its business around as sales trends deteriorate.

J.C. Penney said that Indianapolis-based Simon redeemed 2 million units of limited partnership interests from the department store chain for $248 million. JCP Realty, a unit of J.C. Penney, kept about 205,000 limited partnership units.

J.C. Penney received the units at the time of Simon's initial public offering in 1993 as part of joint-venture investments the companies made together in several shopping malls.

ADVERTISEMENT

  • Did You Have a Comment To Make?
    Kay, I am sure you think you made a point, but your post came across as just crazy ranting. Also, PepsiCo posted $9.63 billion in profits in 2011 (about $1 billion more profitable than Coca-Cola in 2011). So, if that is your idea of "going under," please sign me up because I would be over 9 billion dollars richer. Now, if you have a sensible comment to post, and you want to explain what point you are trying to communicate, then please do so. Otherwise, you might want to channel your energies into something more constructive.
  • Shopping?
    i think JCP is getting the message? people dont want things shoved in their faces and now JCP is going to go under... maybe Coke should wake up too before they end up going the way of Pepsi and JCP! Redact SRGL or they can just go under too!
    • Bolsters?
      How does converting securities to cash bolster the Balance Sheet? Were they carrying them at less than market value? Sounds to me more like a last ditch effort to raise cash. I wonder what JCP's cash burn rate is, and how much time this buys them. Not much, I would think.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    thisissue1-092914.jpg 092914

    Subscribe to IBJ
    1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

    2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

    3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

    4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

    5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

    ADVERTISEMENT