By Colin Barr
January 24, 2011

A Penney saved is worth $350 million to Bill Ackman.

Or at least, that’s how far the activist investor is ahead on the big bet he made this summer on JCPenney (JCP). The department store operator’s shares surged 7% Monday after it closed some stores and added Ackman and a like-minded activist, Steven Roth of Vornado (vno), to the board.

Ackman and Roth together control more than a quarter of JCPenney shares. That doesn’t seem to have changed since Roth and Ackman disclosed their cooperation in October, but JCPenney’s attitude toward them sure has.

On Oct. 18, the Plano, Texas, company adopted a shareholder rights plan with the aim of punishing investors who bought more than 10% of its stock. But on Monday, the company sang a different tune.

“We welcome Bill and Steve to the board,” CEO Mike Ullman said Monday. “They share our passion for operational excellence and are committed to enhancing value for all of the company’s shareholders.  We look forward to benefitting from their expertise.”

Joining the Penney board marks a victory for Ackman after bruising defeat at the hands of another big department store chain, Target (tgt). Ackman spent years pushing management there to spin off the company’s real estate holdings in a separate venture, but he lost a board fight in 2009 and saw the value of his stock plunge to boot.

The story at Penney has been different. Ackman started buying Penney in mid-August with the stock at a two-year low under $20. He ended up buying 39 million shares and controlling more than 16% of the stock, at around $900 million — an average price of around $23.

With Monday’s rally, the stock is now above $32 – putting Ackman and Roth up some 40% in less than six months, and valuing Ackman’s stake at more than $1.25 billion.

Penney’s capitulation comes just a week after Arkansas-based department chain Dillard’s (dds) set off a flurry of investor interest in the sector by saying it would form a real estate investment trust to cash in on the value of its underlying real estate holdings.

But Penney owns less than half its stores, in contrast to Dillard’s which owns some 87% of the space it uses, and Ackman told CNBC he wanted to help the company spruce up its retail business.

Of course, actually doing that is a lot harder than idly saying it, as the likes of Ed Lampert have found to their distress. But for his sake at least Ackman is on the right side of this trade for now.

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