Investor Ackman ready to test Target

By Staff -- Home Textiles Today, 7/16/2007 1:30:00 PM

Minneapolis – In an SEC filing today, Pershing Square Capital Management reported that it has amassed 81.8 million shares, or about a 9.6% stake, in the common stock of Target. (Acquired mainly in April and May, these shares had a purchase value of approximately $4.8 billion.)

In the filing, William Ackman, managing member of Pershing, said he and his group believe that Target’s stock “is undervalued and intend to discuss with management ways in which this undervaluation can be corrected.”

The filing also states that at some future point, “one third of the net after-tax realized profits after investment liquidation from incentive allocations” will be donated to Ackman’s related Pershing Square Foundation. “or to other charitable organizations that are qualified under Section 501(c)(3) of the Internal Revenue Code.”

Wall Street analysts and commentators offered a range of theories about Ackman’s intentions - - from pressuring Target to accelerate stock buybacks to spinning off its credit card business. The only thing for certain is that since last Wednesday the price of Target shares has leapt up more than 6%, hitting a 52-week high of $70.75.