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CNBC Exclusive: CNBC's Andrew Ross Sorkin Speaks with Pershing Square Capital Management CEO Bill Ackman

Tuesday, 13 Aug 2013 | 9:08 AM ET

WHEN: TODAY, TUESDAY, AUGUST 13TH

WHERE: CNBC'S "SQUAWK BOX"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview from CNBC's Andrew Ross Sorkin. All references must be sourced to CNBC.

ANDREW ROSS SORKIN: WELCOME BACK TO "SQUAWK BOX." WE HAVE NEWS THIS MORNING. BILL ACKMAN STEPPING DOWN FROM THE BOARD OF J.C. PENNEY. I JUST GOT OFF THE PHONE WITH HIM IN AN EXCLUSIVE INTERVIEW. WE SPOKE ABOUT WHY HE STEPPED DOWN FROM THE BOARD AND WHY HE RAISED THESE ISSUES PUBLICLY. SOMETHING THAT IS QUITE UNUSUAL. HE SAID, "I ELEVATED A BUNCH OF ISSUES THAT ARE CRITICALLY IMPORTANT BY MAKING THEM PUBLIC. WE CAME TO AN AGREEMENT ON RON TYSOE," HE IS GOING TO BE JOINING THE BOARD IN BILL ACKMAN'S PLACE. HE SAID HE STEPPED DOWN BECAUSE, "THE BOARD WILL NOW FUNCTION MORE EFFECTIVELY WITHOUT THE NOISE." HE CONTINUED TO SAY, THAT "I'M CONFIDENT WHAT HE DID WOULD FOCUS THE BOARD ON ALL THE RIGHT THINGS." AND ON THE ISSUE OF WHETHER HE IS GOING TO SELL HIS SHARES. HE SAID, "IF I WANTED TO SELL, I COULD HAVE SOLD ALL ALONG DURING THE QUARTERLY WINDOW." SO AS A BOARD MEMBER, BECAUSE YOU HAVE INSIDE INFORMATION, THERE ARE WINDOWS IN WHICH YOU CAN SELL.

BECKY QUICK: HE SAID HE DIDN'T SELL ANY IN THAT WINDOW?

SORKIN: HE DID NOT. HE WILL STILL THOUGH, HAVE TO BE – WE TALKED ABOUT THIS BEFORE – BECAUSE HE HAS INSIDE INFORMATION, HE IS LIKE A BOARD MEMBER TODAY AND WILL HAVE TO WAIT POTENTIALLY FOR THE NEXT WINDOW. AT SOME POINT, DEPENDING ON THE STRATEGY OF THE COMPANY THOUGH, HE MIGHT BE ABLE TO SELL. HE SAYS HE HAS CONFIDENCE IN THIS COMPANY AND IT IS ON THE RIGHT PATH AND THAT HE BELIEVES THAT BY MAKING THIS DECISION PUBLIC, AND THE CONVERSATIONS PUBLIC, HE IS HE HAS HELPED PUT THE COMPANY ON THE RIGHT PATH.

QUICK: SO HE STILL OWNS 18 PERCENT?

SORKIN: HE STILL OWNS 18 PERCENT. HOWEVER – HERE IS THE IMPORTANT PART – HIS BASIS IN THE COMPANY IS 25 DOLLARS PER SHARE. SO IT IS NOT CLEAR THAT HE HAS ANY AMBITION TO SELL THESE SHARES AT A LOW PRICE. ONE OTHER THING, HE QUOTED WARREN BUFFETT. WARREN BUFFETT HAD A LETTER THAT HE WROTE IN 1993. I JUST WANT TO READ YOU A BIT OF IT. HE IS WRAPPING HIMSELF IN SORT OF THE BUFFETT FLAG A LITTLE BIT IN TERMS OF HIS DECISION TO GO PUBLIC WHICH HAS BEEN SOMETHING THAT PEOPLE, INCLUDING MYSELF, HAVE BEEN HIGHLY CRITICAL OF. THIS IS WHAT WARREN BUFFETT SAID. HE SAID, "A DIRECTOR WHO SEES SOMETHING HE DOESN'T LIKE SHOULD ATTEMPT TO PERSUADE OTHER DIRECTORS OF HIS VIEWS. IF HE IS SUCCESSFUL, THE BOARD WILL HAVE THE MUSCLE TO MAKE THE APPROPRIATE CHANGE. SUPPOSE THOUGH, THAT THE UNHAPPY DIRECTOR CAN'T GET OTHER DIRECTORS TO AGREE WITH HIM. HE SHOULD THEN FEEL FREE TO MAKE HIS VIEWS KNOWN TO THE ABSENTEE OWNERS. OTHERWISE KNOWN AS THE PUBLIC SHAREHOLDERS. DIRECTORS SELDOM DO THAT OF COURSE. THE TEMPERAMENT OF MANY DIRECTORS WOULD IN FACT BE INCOMPATIBLE WITH CRITICAL BEHAVIOR OF THAT SORT.BUT I SEE NOTHING IN PROPER IN SUCH ACTIONS ASSUMING THE ISSUES ARE SERIOUS.NATURALLY, THE COMPLAINING DIRECTOR CAN EXPECT A VIGOROUS REBUTTLE FROM THE UNPERSUADED DIRECTORS. A PROSPECT THAT SHOULD DISCOURAGE THE DISSENTER FROM PERSUING TRIVIAL OR NON-FRACTIONAL CAUSES."


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