Bill Ackman's Pershing Square Sells $835 Million in Mondelez Shares

William Ackman's Pershing Square Capital Management LP said it sold nearly $835 million in shares of snacks maker Mondelez International Inc., a day after losing $1 billion on paper on its investment in Valeant Pharmaceuticals International Inc.

In an email to investors, Mr. Ackman said Pershing reduced its stake to 5.6% because Mondelez had become an outsized position "in light of its initially large size and its outperformance relative to other holdings."

The fund completed a block sale of 20 million Mondelez shares after markets closed Wednesday. The stock, which closed at $41.72, is up 20% over the past 12 months.

Mr. Ackman's investment in Valeant, meanwhile, has become a considerable headache. The shares plunged 51% on Tuesday on disappointing guidance and a possible default warning.

Mr. Ackman acknowledged to his investors that the company "shocked the market" and the day's events "caused investors to lose total confidence in the company." He also added that he planned to get more involved at the drug company.

Pershing Square's 9% stake in Valeant is now its worst investment ever and compounds its lackluster performance in recent months. When Pershing Square first disclosed its Valeant position last year, shares traded at nearly $200 and the stake was worth about $4 billion. Wednesday, Valeant's shares closed at $33.54, valuing the stake at about $1.03 billion, according to FactSet.

The fund also has suffered big losses on its investment in Herbalife Ltd.

As for Mondelez, Pershing Square last year built up its stake, which included options and forward contracts, in the maker of Oreo cookies and Ritz crackers. As of Dec. 31, the fund owned 43.4 million shares, according to FactSet.

Mr. Ackman added Wednesday that Mondelez remains the fund's largest exposure, and it has no current plans to sell any of its other investments. He said Pershing Square continues to believe in the potential for operating improvements and margin expansion at Mondelez that will lead to further increases in value.

Write to Lauren Pollock at [e-mail]

(END) Dow Jones Newswires

March 16, 2016 18:45 ET (22:45 GMT)

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