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Times and Democrat – Activist shareholder William Ackman sought for months to replace four incumbents on the Minneapolis-based retailer’s board of directors with five of his own picks, including himself.
The head of Pershing Square Capital Management, which has a 7.8 percent stake in Target, has argued that the cheap chic discount retailer, which has stumbled as shoppers focus on basics, needed new perspective. He said it especially needed to beef up its board in the areas of retail and real estate to better compete with its chief rival, Wal-Mart Stores Inc., based in Bentonville, Ark.
Shareholders rejected those arguments at their meeting outside Milwaukee Thursday. They also sided with the company in approving a measure that sets the board’s size at the current 12 members, instead of the 13 that Ackman had wanted.
A hedge fund fraud that involved a pair of funds claiming to hold more than $800 million in assets has been halted, according to the US Securities and Exchange Commission.
In a statement, the regulatory body said the two funds lost money and contain less than $1 million.
Bradley Ruderman is alleged to have raised more than $38 million from investors via the two hedge funds, Ruderman Capital Partners and Ruderman Capital Partners A.
He is accused of falsely claiming that the investment vehicles held positions in established securities such as Wal-Mart Stores, Apple and Microsoft, as well as stating prominent people were investors in his funds, when they were not.
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
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Associated Press – Activist hedge fund manager William Ackman is in talks with Target Corp. about naming potential directors to the discount retailer’s board, according to a Securities and Exchange Commission filing on Thursday.
Target shares gained 61 cents, or 2.2 percent, to $28.43 in aftermarket electronic trading, after gaining 23 cents to close the regular session at $27.82. The stock has lost about half of its value since peaking at $59.55 in September before the market meltdown.
In recent months, Target Corp. has suffered from a drop in consumer spending, while other discount chains — particularly rival Wal-Mart Stores Inc. — have outperformed. While Wal-Mart concentrates on offering low-price essentials, Target has focused more on a cheap-chic variety of more discretionary items like clothing and home decor.
On Tuesday, Target reported that its fourth-quarter profit fell 41 percent.
