May 21, 2009 / 2:17 PM / in 9 years

Ackman says no ongoing Target settlement talks

SAN FRANCISCO (Reuters) - Pershing Square hedge fund manager William Ackman, who is locked in a proxy battle with Target Corp (TGT.N), said on Thursday there are no settlement talks ongoing between the two sides just one week before the discount retailer holds its annual meeting.

Shoppers enter a Target store in Arvada, Colorado February 24, 2009. REUTERS/Rick Wilking

“Pershing Square is prepared to do whatever is in the best interest of shareholders,” Ackman told Reuters in an interview, but added: “There are absolutely no settlement discussions that are ongoing.”

Target is holding its annual meeting on May 28, and Ackman, whose Pershing Square Capital Management has amassed a 7.8 percent stake in the retailer, is running a proxy battle to win five seats on the retailer’s board. Target is running a slate of four incumbent nominees.

The battle between the two sides has become increasingly heated in recent weeks, and in a setback for Target, leading proxy advisory firm RiskMetrics on Tuesday sided with Ackman, recommending shareholders elect him and a fellow nominee to the retailer’s board.

But Target is disputing the RiskMetrics’ report, saying it contains statements that are “inaccurate or misleading.”

In a “white paper” posted on its website late Wednesday, Target cited what it said were flaws in the report.

Target noted the report refers to its “atypical amount of real estate ownership” compared with other big-box retailers.

“In fact, however, Wal-Mart, Target, Home Depot, Lowe’s and Costco all own a high percentage of their U.S. real estate and all own more real estate than most publicly traded REITs,” Target wrote.

Target also said RiskMetrics wrongly paints it as resistant to change.

“Target regularly adds fresh perspectives to its Board with the addition of new directors. Target has added six new Board members since 2002, including three added since 2007,” it said.

RiskMetrics said it had no comment on the white paper.

Institutional investors often use opinions by shareholder advisory firms like RiskMetrics to determine how to vote in contested elections, and votes were starting to roll in ahead of Target’s annual meeting.

The State of Wisconsin Investment Board has voted in support of all of Target’s nominees, according to a posting on its website.

It owns roughly 2 million Target shares, or a 0.27 percent stake in the retailer, according to filings with the U.S. Securities and Exchange Commission.

Target shares were down $1.07, or 2.5 percent, at $41.85 in early afternoon trading on the New York Stock Exchange.

Reporting by Nicole Maestri, editing by Maureen Bavdek and Gunna Dickson

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