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Ackman: Spin Off Target's Real Estate
Activist investor William Ackman wants to separate Target Corp. from its real estate.
Ackman took his case to shareholders Wednesday and argued that the firm's stores and the land on which they sit would be valued more by the markets if they were considered separately. The proposed spin-off, if approved by the company, would create the largest real estate investment trust in the country and the 62nd largest company in the S&P 500.
Target expressed concerns, but said it would continue to review Ackman's proposal as investors drove the retailer's stock up 5.7 percent to $40.72 on what was a down day for the markets overall. Ackman owns just less than 10 percent of Target through his Pershing Square Capital Management.
What we have in mind is something that has not been done before, Ackman said at an investor presentation in Midtown Manhattan, where he laid out the specifics of his plan.
Target owns about 95 percent of its stores and roughly 85 percent of the land under them, he said. By comparison, Macy's Inc. owns 68 percent of its stores and Wal-Mart Stores Inc. owns 63 percent.
Ackman said the land and the buildings of Target's stores had a...