Target delaying decision on credit-card business

NEW YORK (Reuters) - Target Corp (TGT.N) said on Wednesday it is taking longer than expected to determine whether to sell its credit-card assets, hampered in part by current market conditions.

The discount retailer, which had previously said it would make a decision by the end of December, now expects to announce a decision on possible alternative ownership structures for the business in the first calendar quarter of 2008.

In September, Target, which has been under pressure from activist investor William Ackman to boost its stock price, said it was considering selling its credit-card assets.

The retailer said it would try to determine whether it or a financial institution was better suited to own the assets, which include the Target Visa Card and Target Credit Card and other financial products.

But since the announcement, many Wall Street analysts have questioned whether it can even sell the business since many banks that would be possible buyers of the portfolio are faltering themselves.

In November, when Target reported third-quarter results, it said it was evaluating "whether the benefits of a potential transaction outweigh its expected dilutive impact on earnings per share."

On Wednesday, it said excluding any possible transaction-related effects, it still expects increased earnings before taxes from the credit-card portfolio in the fourth quarter and throughout 2008.

(Reporting by Nicole Maestri, editing by Maureen Bavdek)