New York (HedgeCo.Net) – Target Corp. asked shareholders yesterday to reject a proposed slate of directors nominated by Pershing Square Capital head William Ackman.  
Ackman’s hedge fund, who holds a 7.8 percent stake in the discount retailer, is continuing his proxy fight in an effort to boost stock prices and investor returns. 

Ackman has suggested selling the land underneath Target locations, prompting the company to warn shareholders against his “risky agenda.”

“Ownership of the land under our stores and distribution centers allows Target to benefit from the value that we create on those sites, and provides necessary flexibility to make significant improvements to our stores to drive our strategy and protect our brand,” Target said in its regulatory filing yesterday.

Hedge fund Pershing Square IV, which is invested solely in Target, rose almost 50% last month after posting record losses last year.  Earlier this year, Ackman told investors they could withdraw as much of their capital as they wanted, after the fund plummeted 90 percent.  He threw in $25 million of his own money to help pay clients back.

On Monday, Pershing Square proposed a slate of five candidates to the board, all of whom claim to have the retail experience necessary for the company to succeed.  Meanwhile, Target is hoping the shareholders will ignore the hedge fund’s advances and instead elect their proposed slate of four.

Ackman’s candidates for the board include himself, Richard Vague, a former bank executive, former Starbucks CEO Jim Donald, Ronald Gilson, a law professor, and Michael Ashner, CEO of Winthrop Realty Trust.

“We believe Pershing Square’s sizable derivative positions create an incentive to favor risk-taking to affect short-term share price performance, even if it harms Target in the long run,” Target added.

Target shares jumped 5.27 percent today in morning trading to $39.58.  Shares are still recovering from their tumble in 2008, when they reached almost $60 in September.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: ceo jim, discount retailer, investor returns, michael ashner, necessary flexibility, pershing square, pershing-square-capital, proxy fight, realty trust, record losses, retail experience, share price performance, significant improvements, stock prices, target locations, target-corp, term share, william ackman

New York (HedgeCo.Net) – Pershing Square Capital head William Ackman is planning to nominate himself, along with four others to the Target Corp. board of directors, in which the hedge fund holds a near 10 percent stake.

Ackman has confirmed that he is nominating former Starbucks CEO Jim Donald, Winthrop Realty Trust CEO Michael Ashner, former bank exec Richard Vague and Ronald Gilson, a professor of law at both Stanford and Columbia, to the discount retailer’s board.

Ackman has been vocal about his intent to spruce up Target’s management in an effort to boost share prices and returns for his investors, while giving the company a better chance at competing with fellow discount chain Wal-Mart.

While Target has experienced lagging stock prices and lower-than-expected sales this past year, they are “disappointed that Pershing Square has decided to pursue a costly and disruptive proxy contest, especially in light of our previous dialogue,” according to a statement.  They also said they have been responsive to shareholders while partaking in discussions with the hedge fund over the last 20 months.

Ackman has already allowed investors in his Pershing Square IV Fund to withdraw their capital when the fund, which was invested solely in Target, turned out to be “one of the greatest disappointments of [his] career,” after plunging over 90 percent this year. 

Ackman stated that despite the performance, he still has confidence in Target and believes that the new slate of directors will bring an experience to the board that the company is currently lacking.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com   

Tags: accredited-investors, ceo jim, ceo michael, disappointments, discount retailer, gilson, hedgeco, pershing square, pershing-square-capital, realty trust, s board, share prices, starbucks, stock prices, target-corp, wal mart, william ackman, winthrop