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William Ackman's Pershing Square builds nearly $1B stake in Lowe's, source says

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William Ackman's Pershing Square builds nearly $1B stake in Lowe's, source says

William Ackman's Pershing Square Capital Management LP has taken out an approximately $1 billion stake in home improvement retailer Lowe's Cos. Inc., a source familiar with the investor's strategy told S&P Global Market Intelligence.

The source declined to comment on the stance Ackman will take toward Lowe's and incoming CEO Marvin Ellison, the executive who is currently CEO of department store chain J.C. Penney Co. Inc.. Ellison will leave J.C. Penney on June 1 and start at Lowe's July 2.

The Wall Street Journal first reported the investment. The newspaper reported that Ackman revealed the stake at a New York conference on May 23, citing unnamed sources who attended the conference. Several sources told the Journal that Ackman supports Ellison's appointment at Lowe's.

Pershing Square declined to comment. Lowe's did not immediately respond to a request for comment.

Ellison spent 12 years at Lowe's competitor Home Depot Inc. where analysts say he drove growth in the company's business that serves contractors and in the company's physical stores. Ellison is expected to implement similar initiatives at Lowe's.

Ackman joins D.E. Shaw & Co. LP, which has taken an activist stake in Lowe's, Bloomberg reported in January. D.E. Shaw is concerned about Lowe's performance against its peers, the report said.

D.E. Shaw holds 1.05% of total outstanding shares in Lowe's as of March 31, a market value of $755.3 million, according to S&P Capital IQ.