Holiday Central

Target: What Will Ackman Do With Increased Shares?


Pershing Square Capital Management upped its stake in Target beyond +5%. Per the SEC regulatory filing made Monday, Bill Ackman increased his stake in TGT to 9.6% of shares outstanding.

Ackman will take an active role in pressing management to boost shareholder value but as to how he'll do that--that's the question everyone wants answered. I wrote in the post mentioned above, about just what Ackerman's interest could be: 1) the possibility of a sale/leaseback real estate deal to lever up cash or 2) to spin-off the credit card division (we're hearing this is the less likely of the two options.)

Former "hedgie" and current CNBC "Fast Money" guru Jeff Macke(whose father was once CEO of Target) gives the following take on just what Ackman is looking at: "I would bet it's a real estate play but a) it's an idea Target has already thought of and rejected b) Ackman won't have the juice to get them to think differently."

One interesting new twist is that Pershing Square said it plans to donate one-third of the net after-tax realized profits from its investment in Target to the Pershing Square Foundation or other charitable organizations.

Questions? Comments?

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