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Proxy battle distracts focus


The executives at Target likely would rather spend their time figuring out ways to improve business and grow profits, instead they are stuck in a fight with venture capitalist William "Bill" Ackman, founder and CEO of investment and hedge fund firm Pershing Square, who announced to the chagrin of Target's board and management that he will shortly wage a proxy battle for control of the upscale discount-store giant.

Ackman, who once called Target "probably the best retailer in the world" in an interview with Bloomberg news service, said he intends to nominate five representatives for election to Target's board of directors at the company's annual meeting of shareholders May 28. His announcement follows Target's rejection of his bid for two seats on the board, and caps nearly two years of on-and-off negotiations between the 1,699-store chain and Ackman, whose firm has reportedly accumulated roughly 10% of Target's stock since April 2007.

Responding to Ackman's bid, Target's board and management firmly rejected his proposals. "We are disappointed that Pershing Square has decided to pursue a costly and disruptive proxy contest, especially in light of our previous dialogue," the board noted in a statement. "Target has a long history of being responsive to shareholders and has engaged in numerous discussions with Pershing Square over a 20-month period."

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