Ahead of the Bell: Pershing Square meeting

NEW YORK - A major shareholder in Target Corp. which had previously pushed the company to sell off part of its credit card portfolio plans to present a possible deal involving the discount retailer on Wednesday.

Target Corp. said Tuesday it had "serious concerns" about the proposal, which it said involves its real estate.

Pershing Square Capital Management LP, which owns just under 10 percent of Target's common stock, has said the deal "will build long-term value for Target Corp. and all of its stakeholders."

The hedge fund led by investor William Ackman said the presentation would be "of particular interest to investors and analysts focused on retail, real estate, fixed income and credit."

Pershing, which also holds a stake in bookseller Borders Group Inc., had pressured Target earlier this year to make a financial move with its assets, including options like selling part of the credit card portfolio or selling some of its real estate and leasing it back. The company ended up selling 47 percent of its credit card receivables to JPMorgan Chase for $3.6 billion in May.

Target said it had shared its concerns with Pershing.

"We respect the spirit with which these ideas were presented, and will share our perspective with the financial community in the near future," the statement said.

Pershing had no immediate response to Target's statement, but said in its earlier release that "Target's thoughtful and constructive approach with shareholders has been instrumental to Pershing Square's work in developing a potential transaction."

Target, which is facing slower sales and rising delinquencies in its credit card business, said last week that it is further tightening finance terms for its card holders — even those with good standing. It may also become even more stringent if credit conditions keep deteriorating.

The cheap chic discounter is more vulnerable to the economic slowdown than competitors such as Wal-Mart Stores Inc. as frugal customers focus on necessities like groceries and diapers, instead of trendy clothes and housewares, its forte.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.