UPDATE 2-Target delaying decision on credit-card business

(Rewrites first paragraph, adds byline, analyst comment)

By Nicole Maestri

NEW YORK, Dec 19 (Reuters) - Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) said on Wednesday it is taking longer than expected to determine whether to sell its $7 billion in credit card receivables, hampered 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.

"We are not surprised by the news," said Joseph Feldman, a retail analyst with Telsey Advisory Group, of the delay.

"I think if it were not for Bill Ackman, they probably never would be considering (the sale) as publicly as they are."

In July, activist investor Ackman said his fund owned a 9.6 percent stake in Target, and he wanted to speak with management about trying to boost the discount retailer's stock price.

Before Ackman announced his stake, the retailer had repeatedly said it would not sell the card business, which had generated big profits for the company.

But after the disclosure, analysts speculated that Ackman would pressure Target to sell off its credit card portfolio, and in September, Target said it was reviewing "potential ownership alternatives" for its credit card receivables.