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Target Will Not Pursue Pershing Square Spin-Off


Minneapolis Target Corp. said Friday it will not implement a major shareholder's proposal to create a real estate investment trust, describing the value it would create as "highly speculative." Investor William Ackman, who runs hedge fund Pershing Square, has proposed separating the land Target owns underneath its stores and distribution centers.

The retailer said Friday that after evaluating the proposal, it will not pursue the deal given the costs, risks and loss of financial flexibility. It said its concerns are heightened given the current economic environment.

“Target does not share Pershing Square’s perspective that execution of this proposed transaction will generate measurable shareholder value over time and believes the risks, particularly in light of the serious challenges facing our retail and credit-card segments in 2008 and 2009, are significant,” said Gregg Steinhafel, president and CEO of Target Corp., in a statement. “Both our Board and executive team remain firmly committed to generating value for our shareholders and expect to achieve this objective over the next three to five years through our continued, thoughtful focus on our current strategy and core business operations.”

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