March 26, 2009 / 10:59 PM / 11 years ago

Ackman says Target mis-stated size of board

SAN FRANCISCO (Reuters) - Hedge fund manager William Ackman, who is pushing for five seats on the board of Target Corp (TGT.N), accused the retailer on Thursday of mis-stating the size of its board, which may have impeded his proposal to elect new directors.

William Ackman, Hedge fund manager and the founder of Pershing Square Capital, speaks during the Wall Street Journal Deals and Dealmakers conference, in New York, June 11, 2008. REUTERS/Chip East

The latest move in a battle for boardroom seats at the big-box retailer came a week after Target said it was determined to re-elect four directors — which Ackman opposes — whose terms expire at a shareholders meeting on May 28.

Ackman, the head of New York-based Pershing Square Capital Management — which owns roughly 7.8 percent of Target — said last week he and four others would run for board seats.

Target responded at the time by saying its board comprised 12 directors, and that it was nominating four — not five — for re-election at its upcoming annual meeting, rejecting Ackman’s nominees.

In a letter dated Thursday and filed with the U.S. Securities & Exchange Commission, Ackman wrote to Target Chairman and Chief Executive and Gregg Steinhafel to say he disagreed with the size of the board.

We “have found no disclosure to the effect that the size of the Target Board has been changed from 13,” he wrote. Ackman noted that although former Chairman Bob Ulrich had recently resigned, the board “does not automatically shrink as a result of a resignation; rather, a vacancy is created.”

Ackman said if the company does not nominate a fifth director to fill a 13-member board, the issue should be jointly submitted for binding arbitration.

Ackman, who persuaded fast-food chain Wendys WEN.N to sell its coffee shop unit, has been pushing the retailer to offload its credit card operations and spin off the land under its stores, to boost Target’s stock.

Ackman has watched his fund lose hundreds of millions of dollars as shares of Minneapolis-based Target tumbled.

His board nominees include former Starbucks Corp (SBUX.O) CEO Jim Donald, former bank executive Richard Vague, Michael Ashner, chairman and CEO of Winthrop Realty Trust Inc, and Ronald Gilson, a corporate governance expert and law professor at Columbia University.

Shares of the company closed at $34.93, up 5 percent, on the New York Stock Exchange. (Reporting by Alexandria Sage; editing by Gunna Dickson)

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