Target puts temporary stop on efforts to sell credit-card receivables
Minneapolis -- Target Corp. on Wednesday announced it is temporarily suspending its efforts to sell its credit-card-receivables portfolio until later this year or early 2013. The company also outlined plans to pay J.P. Morgan Chase & Co. about $2.8 billion, along with a make-whole premium, to retire financing from 2008. The payment, along with a premium, is expected to reduce its fourth-quarter earnings by about 8 cents per share.
Target said it still wants to sell its credit-card receivables portfolio, but said it didn’t believe the time was right to complete a deal now.
“Our desire to sell the portfolio on appropriate terms remains the same today as it was when discussions began, but we believe that now is not the time to finalize a transaction,” said Doug Scovanner, executive VP and CFO, Target. “We believe a pause in discussions until later in 2012, combined with repayment of the Chase Card Services financing, will enable Target to reach an agreement with a high-quality financial partner on acceptable terms.”
In January 2011, Target announced plans to actively pursue a sale of its credit card receivables portfolio, and that if an appropriate transaction were to occur it would likely be achieved late in 2011 or early in 2012. The company now believes a transaction could occur in late 2012 or early 2013, about a year later than originally expected.