Activist investor Bill Ackman sent a second letter to J.C. Penney Company, Inc. (NYSE:JCP)’s board of directors today demanding a meeting, the replacement of Chairman Tom Engibous and also that the search for a new chief executive officer be sped up. Ackman wants to see a new CEO in place by the middle of next month. The company’s board struck back at Ackman’s previous letter on Thursday, expressing disgust that they had received it at the same time as the media.

J.C. Penney

Shares of J.C. Penney Company, Inc. (NYSE:JCP) plummeted 7 percent Friday amidst news of this latest development in the company’s boardroom brawl.

Ackman turns up the heat on J.C. Penney’s board

CNBC’s Matthew J. Belvedere and Scott Wapner report that Ackman’s latest letter urges the retail chain’s board to put together a short list of possible candidates for the CEO position immediately. We’re not even three weeks into the planned six-month search for the next CEO, although it’s been several months since Ullman was appointed to retake the CEO job.

Former CEO Myron Ullman retook the helm of J.C. Penney Company, Inc. (NYSE:JCP) earlier this year when then-CEO Ron Johnson was ousted after a series of bad decisions regarding the company’s strategies. Johnson was brought in by Ackman to orchestrate a turnaround at the aging retailer, but the chain’s sales slumped even more after Johnson implemented his changes. Since Ullman returned, he brought back the original merchandise which attracted core customers driven away by Johnson’s changes.

Possible candidates named

Bloomberg’s Beth Jinks and Lauren Coleman-Lochner report that sources have named three executives who are on J.C. Penney’s short list of candidates for CEO. The media outlet listed Foot Locker, Inc. (NYSE:FL) CEO Ken Hicks, Bon-Ton Stores Inc. CEO Brendan Hoffman and Hudson’s Bay Co (TSE:HBC) executive Bonnie Brooks.

Citi sees three possible outcomes to the battle

Citi analysts Deborah L Weinswig and Tiffany Kanaga issued a report to investors after Bill Ackman’s initial letter to J.C. Penney Company, Inc. (NYSE:JCP)’s board on Thursday. They see three possible scenarios and side with Ackman in the need for a “dream team” as soon as possible.

Their first scenario is that Ackman could win this boardroom brawl and a “dream team” could be installed at the retailer for a fairly short time. This was the suggestion offered in Ackman’s initial letter. The analysts have a Sell rating and $11 per share price target on J.C. Penney, and they specifically name Foot Locker, Inc. (NYSE:FL) CEO Ken Hicks as a member of the “dream team” they would like to see. If he does go back to the chain, they believe their Sell rating could be at risk.

In their second scenario, Ackman loses, Ullman stays on as CEO and the company’s board of directors casts a wider net in the search for the next CEO. And third, Ackman could lose and then just dump all of his J.C. Penney shares, which they say “would obviously be a very unfortunate outcome.”