(Reuters) - Nearly two years ago, activist investor William Ackman, through his hedge fund Pershing Square Capital Management, began to amass a large stake in discount retailer Target Corp (TGT.N).
His bullish bet has soured, as Target’s stock has fallen roughly 50 percent since April 2007.
Ackman has pressed the retailer to shake up its business, but Target rejected his proposal last year to spin off the land under its stores to boost its stock price.
Ackman is now pressing the company to put his nominees on its board.
Here is a chronology of the battle between Ackman and Target:
July 16, 2007
Pershing Square discloses it owns a 9.6 percent stake in Target. Ackman plans to speak to Target’s management about boosting its stock price.
Pershing Square began buying shares in the retailer in April 2007. During that month, Target stock was trading at around $60 a share.
Target spokeswoman Susan Kahn does not comment directly on Pershing Square’s stake, but says the company welcomes “a dialogue on company strategy and performance with any member of our investor base and the financial community.”
Analysts say Ackman might suggest a sale of Target’s credit card operations or he could push the retailer to sell some real estate holdings.
September 12, 2007
Target says it is considering selling $7 billion in credit-card assets and will evaluate its pace of share repurchases. Chief Financial Officer Doug Scovanner says Target will try to determine whether it or a financial institution is best suited to own the credit-card assets, which include the Target Visa Card and Target Credit Card and other financial products.
November 20, 2007
Target posts a surprise drop in third-quarter earnings, hurt by weak sales of its trendy clothes and home furnishings. It expects “quite modest” earnings growth for the crucial holiday fourth quarter, and announces a new $10 billion share repurchase plan that replaces a previous program that had $3.4 billion remaining.
December 24, 2007
Pershing Square discloses in a regulatory filing its stake has risen to 9.97 percent. Pershing has also invested in Target swaps and options, which combined with the stock gives the fund an economic exposure equal to a 12.6 percent stake.
February 26, 2008
Target reports an 8.1 percent drop in fourth-quarter profit as shoppers spurned purchases of clothes in favor of necessities like food, hurting its margins. The shares close at
March 12, 2008
Target says it is in talks with an investment partner to sell an undivided interest in about one-half of its credit-card receivables for about $4 billion.
May 5, 2008
Target strikes a deal to sell a 47 percent interest in its credit card business to JPMorgan Chase & Co (JPM.N) for an initial investment of $3.6 billion.
May 20, 2008
Target posts a 7.5 percent drop in first-quarter profit. It expects sales growth to remain sluggish unless the economic environment improves.
August 19, 2008
Target reports a nearly 8 percent drop in second-quarter income, and says its focus on trendy merchandise could be a challenge in a downturn.
October 28, 2008
Pershing Square says it will unveil a potential transaction to boost Target’s stock price. It says the deal will be “of particular interest to investors and analysts focused on retail, real estate, fixed income and credit.” Shares close at $38.54.
October 29, 2008
Ackman urges Target to spin off to shareholders a real estate investment trust that would own the land under its stores. Ackman says the proposal would unlock the value of Target’s real estate portfolio, which he puts at $39.1 billion.
Target says Ackman’s analysis “raises serious concerns on a number of important issues.” Shares close at $40.72.
November 17, 2008
Target says third-quarter profit fell nearly 24 percent. It temporarily suspends nearly all share buybacks, cuts its 2009 capital spending plan by $1 billion, and pulls back new store openings at least through 2010.
November 19, 2008
Ackman unveils a revised plan to boost Target’s stock price. He suggests Target form a trust that owns the land under its stores, then spin off 20 percent of the trust in an initial public offering.
Ackman says the $5 billion IPO will allow Target to unlock the value of its real estate, pay down debt, maintain its credit ratings and rejuvenate its stock.
Target says it continues to review the proposal.
November 21, 2008
Target rejects Ackman’s proposal as “highly speculative.” Shares close at $28.08.
November 24, 2008
Pershing Square will put talks with Target on hold until 2009.
February 8, 2009
Ackman says investors who put money in Pershing Square IV, his fund that bets exclusively on Target, will be allowed to pull out and can expect to be paid in cash.
“I am deeply disappointed by PSIV’s dreadful performance and I apologize profusely for the fund’s results to date,” Ackman writes in a letter to investors. He calls this “one of the greatest disappointments of my career to date.”
February 24, 2009
Target reports a 41 percent drop in fourth-quarter profit after cutting prices to clear holiday merchandise and lost money in its credit card segment. It says results in the first half of the year will be below year-earlier levels.
February 26, 2009
Pershing Square discloses in a regulatory filing it has cut its stake in Target to roughly 7.8 percent, but is negotiating to get its nominees on Target’s board.
Target shares close at $27.82.
March 16, 2009
Ackman will try to put five independent directors on Target’s board in May, according to sources familiar with the proxy matter but not authorized to speak about it publicly. Ackman will be one of the people running for a board seat.
Reporting by Nicole Maestri; editing by Jeffrey Benkoe