NEW YORK (AP) — Less than three weeks ahead of what's expected to be a heated proxy contest at Target's annual shareholders' meeting, activist shareholder William Ackman aims to strengthen his case to investors for a new slate of directors by personally introducing his roster at a town hall meeting here Monday.
According to documents filed Friday with the Securities and Exchange Commission, Ackman, who runs Pershing Square Capital Management, which owns a 7.8 percent stake in the discounter, intends to "improve Target's board and consequently, help make Target a stronger, more profitable and more valuable company."
Friday's filing outlined Ackman's reasons for why investors should pick his nominees and offered comparisons to the Target's incumbent nominees.
"We believe that the deficit of relevant experience and the lack of significant shareholder representation on Target's board has contributed to the company's material underperformance during this recession," Ackman noted in Friday's filing.
Since March, Ackman has been pressing his case in a series of regulatory filings to nominate his own slate of five candidates — including himself — to Target's board. That number includes the seat left vacant by the resignation of Robert J. Ulrich, former chairman and chief executive, who resigned from the board on Jan. 31.
In addition to Ackman, Pershing Square has nominated Winthrop Realty Trust Chairman and CEO Michael Ashner, former Starbucks Corp. CEO Jim Donald, law professor Ronald Gilson, and Richard Vague, the former chairman and CEO of First USA. Ackman has maintained that this slate will bolster the board's expertise in retail, credit cards and real estate issues. In the filing, Ackman insisted that the nominees are "entirely independent" and have "no preconceived agenda other than to maximize shareholder value."
Target has fought back by asking its shareholders to vote against Ackman's picks and support its own board of incumbents. Target has maintained the retailer's shareholders are best served by re-electing the four current directors whose terms expire at this year's annual meeting, set for May 28.
Ackman has long been pushing Target to do more with its assets as part of a campaign to boost the company's stock. But since Target rejected Pershing Square's real estate proposal to separate the land the retailer owns underneath its stores and distribution centers, Ackman has turned his intentions to shaking up the board. Target's shares have fallen 45 percent since May 2008 to $28.83 on March 16, the day before Ackman announced the proposal for new board nominees, but have rallied to $43 since then. Shares are still down 16 percent from a year ago.
Discounters, particularly Target's chief rival, Wal-Mart Stores Inc., have benefited from consumers switching to cheaper stores and focusing on necessities. But at Target, where more than 40 percent of revenue comes from nonessentials such as funky jeans and quilts, the cheap-chic formula has become a drag as shoppers fixate on the lowest prices and forego the extras, no matter how reasonably priced. The company's credit card woes have also dragged down its profits.
Last week, Target announced that same-store sales or sales at stores opened at least a year rose 0.3 percent in April; Wal-Mart's same-store sales rose 5 percent. Same-store sales are considered a key indicator of a retailer's health.
In a letter written by Gregg Steinhafel, Target's chairman, president and CEO, and sent to shareholders last week, he noted that Pershing Square has launched the proxy fight because it rejected its real estate proposal, which it called too risky.
"Your board and management team have a strong track record of success and a clear strategy for sustaining Target's competitive advantage, driving continued profitable growth and creating substantial shareholder value over time," Steinhafel wrote.
Target is Pershing Square's largest investment in its portfolio.
by the associated press
According to documents filed Friday with the Securities and Exchange Commission, Ackman, who runs Pershing Square Capital Management, which owns a 7.8 percent stake in the discounter, intends to "improve Target's board and consequently, help make Target a stronger, more profitable and more valuable company."
Friday's filing outlined Ackman's reasons for why investors should pick his nominees and offered comparisons to the Target's incumbent nominees.
"We believe that the deficit of relevant experience and the lack of significant shareholder representation on Target's board has contributed to the company's material underperformance during this recession," Ackman noted in Friday's filing.
Since March, Ackman has been pressing his case in a series of regulatory filings to nominate his own slate of five candidates — including himself — to Target's board. That number includes the seat left vacant by the resignation of Robert J. Ulrich, former chairman and chief executive, who resigned from the board on Jan. 31.
In addition to Ackman, Pershing Square has nominated Winthrop Realty Trust Chairman and CEO Michael Ashner, former Starbucks Corp. CEO Jim Donald, law professor Ronald Gilson, and Richard Vague, the former chairman and CEO of First USA. Ackman has maintained that this slate will bolster the board's expertise in retail, credit cards and real estate issues. In the filing, Ackman insisted that the nominees are "entirely independent" and have "no preconceived agenda other than to maximize shareholder value."
Target has fought back by asking its shareholders to vote against Ackman's picks and support its own board of incumbents. Target has maintained the retailer's shareholders are best served by re-electing the four current directors whose terms expire at this year's annual meeting, set for May 28.
Ackman has long been pushing Target to do more with its assets as part of a campaign to boost the company's stock. But since Target rejected Pershing Square's real estate proposal to separate the land the retailer owns underneath its stores and distribution centers, Ackman has turned his intentions to shaking up the board. Target's shares have fallen 45 percent since May 2008 to $28.83 on March 16, the day before Ackman announced the proposal for new board nominees, but have rallied to $43 since then. Shares are still down 16 percent from a year ago.
Discounters, particularly Target's chief rival, Wal-Mart Stores Inc., have benefited from consumers switching to cheaper stores and focusing on necessities. But at Target, where more than 40 percent of revenue comes from nonessentials such as funky jeans and quilts, the cheap-chic formula has become a drag as shoppers fixate on the lowest prices and forego the extras, no matter how reasonably priced. The company's credit card woes have also dragged down its profits.
Last week, Target announced that same-store sales or sales at stores opened at least a year rose 0.3 percent in April; Wal-Mart's same-store sales rose 5 percent. Same-store sales are considered a key indicator of a retailer's health.
In a letter written by Gregg Steinhafel, Target's chairman, president and CEO, and sent to shareholders last week, he noted that Pershing Square has launched the proxy fight because it rejected its real estate proposal, which it called too risky.
"Your board and management team have a strong track record of success and a clear strategy for sustaining Target's competitive advantage, driving continued profitable growth and creating substantial shareholder value over time," Steinhafel wrote.
Target is Pershing Square's largest investment in its portfolio.
by the associated press
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