Target urges rejection of Ackman's "risky agenda"

CHICAGO, April 8 - Retailer Target Corpon Wednesday again asked shareholders to reject an independent slate of directors, warning that a vote for William Ackman's group of five candidates could support his "risky agenda."

For the third day in a row, the Midwestern retailer, known for affordable but trendy clothes and home furnishings, tried to win the upper hand in an intensifying proxy contest waged by East Coast hedge fund Pershing Square Capital Management LP.

Pershing Square's founder William Ackman, who began amassing the fund's 7.8 percent stake in Target in April 2007, has suggested selling the land under Target's stores to boost a sagging share price. Target said the plan was risky.

"We strongly believe that Bill Ackman is pursuing this proxy fight as a platform to advance his own risky agenda which is not aligned with the interests of all Target shareholders," the company wrote in its regulatory filing.

Target has intensified its effort to fend off Ackman, who cemented his activist credentials by winning concessions at Wendy's International Inc and McDonald's Corp, because shareholders will be asked at next month's annual meeting to select a slate of directors.

Target has proposed a slate of four directors, while Pershing Square is pushing its slate of five directors.

"We believe Pershing Square's sizable derivative positions create an incentive to favor risk-taking to affect short-term share price performance, even if it harms Target in the long run," the company added.

At the same time, Target said that its slate offered shareholders the chance to stick with people who have provided "effective and independent oversight and direction to the company."

Pershing Square did not return a call seeking comment.

In a regulatory filing on Monday, Pershing Square proposed a slate of five director candidates, who it claimed had ties to retailing from food to credit cards and real estate.

The battle for board control largely stems from the large decline in Target's shares as the retailer, like its competitors, has struggled in the current economy as consumers reduce spending.

Part of Pershing Square's proposed restructuring of Target would involve creating a separate public company to own the store and distribution center land currently owned by Target. That is a move Target opposes.

"Ownership of the land under our stores and distribution centers allows Target to benefit from the value that we create on those sites, and provides necessary flexibility to make significant improvements to our stores to drive our strategy and protect our brand," the company said in Wednesday's filing.

Target shares were up $2.25 at $37.28 at the New York Stock Exchange on Wednesday afternoon. However, the shares have been in a downtrend since 2007, when they topped $68.