Ackman Takes Roughly $1 Billion Stake in Lowe's -Update

By Cara Lombardo 

William Ackman's Pershing Square Capital Management LP has joined another activist investor in Lowe's Cos., taking a roughly $1 billion stake in the home-improvement retailer, according to people familiar with the matter.

Mr. Ackman revealed the position at a conference in New York on Tuesday, said the people, who were in attendance. Lowe's has a market value of roughly $77.7 billion.

The people said Mr. Ackman supports Lowe's incoming Chief Executive Marvin Ellison, who during 12 years at Home Depot Inc. was credited with improving customer service and e-commerce and expanding its professional business. On Tuesday it was announced that Mr. Ellison would leave his position as CEO at struggling retailer J.C. Penney Co. to take the top job at Lowe's, where he is expected to implement many of the same improvements he made with Home Depot.

Lowe's CEO Robert Niblock said he would retire in March, a week after three new directors joined the board as part of an agreement with activist investor D.E. Shaw & Co., which owns about a 1% stake.

Mr. Ackman agrees with D.E. Shaw's view that Lowe's is lagging Home Depot and could do more to capitalize on an improving real-estate market, the people said. The stake would put two activists in the top 16 holders in the company, according to the people.

Mr. Ackman has pledged to remain out of the headlines after a rough stretch of performance has shrunk his fund, and he has recently taken several new positions where he has said he supported management and avoided detailed complaints, including a quick trade in Nike Inc. and an investment in United Technologies Corp.

Pershing Square's publicly traded fund turned slightly positive for the year this month, according to disclosures, as some of his investments have started gaining again.

Lowe's shares rose 9.8% recently after the company reported growth in sales and earnings.

Write to Cara Lombardo at [e-mail]

(END) Dow Jones Newswires

May 23, 2018 12:39 ET (16:39 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.