Hedge fund pressures Target to dump real estate; also: Travelers nixes bailout funds, Investors cool to Buffalo Wild Wings, and Best Buy warns of vampire power

A Wall Street tycoon with a major stake in Target Corp. is publicly pressuring the retailer to reconsider the real estate it owns. Investor William Ackman was expected to release details of his pitch today, but there was speculation Tuesday that it would involve moving toward a Wal-Mart-like model of leasing, instead of owning, property.

Target was on the defensive, issuing a statement saying it appreciates shareholder dialogue but has “serious concerns” about the proposal being pushed by Ackman’s hedge fund, Pershing Square Capital Management, which controls about a 10 percent stake of Target. The retailer’s stock surged 18 percent on news of the proposal.

The money quote is in the Star Tribune and comes from real-esate consultant Jim McComb, who worked with Daytons and researched the benefits of the company owning instead of leasing stores:

“This is a way for a current set of shareholders to transfer wealth from future shareholders, to the long-term detriment of the corporation. The only reason Ackman wants to do this is to have a special dividend declared. And having taken the money, he leaves Target to go on his merry way, leaving it with a new set of problems down the road.”

More Target: Target plans to appeal a $3.1 million verdict against it in a South Carolina defamation case, the Business Journal reports. An employee wrongly accused a woman of trying to use a counterfeit $100 bill and then circulated her photo and information to area retailers and law enforcement, according to the lawsuit.

With the federal government’s financial bailout plan ballooning to potentially include insurance companies, St. Paul-based Travelers Cos. says it isn’t in need of government assistance. The company’s CEO sent a letter to Treasury Secretary Henry Paulson encouraging the government to thoroughly explore private-market solutions before pumping money into its competitors, too.

Buffalo Wild Wings? More like Buffalo Mild Wings, puns The Motley Fool. The Minneapolis-based sports bar and restaurant chain had been on a hot streak, but the company’s stock fell this week after a disappointing third-quarter earnings report. Not everyone is worried. Investment blogger Chris Katje notes that even in this slowdown they’re still getting good crowds for big games and trivia nights.

Halloween Eve is National Vampire Awareness Day at Best Buy. The retailer wants customers to know TVs, computers and other appliances suck a lot of electricity even when they’re turned off. That’s why it recommends using power strips and shutting them off when devices are not in use. Its advice: Don’t leave cell phone, MP3 or other chargers plugged in when not charging a device, and turn off your computer when not in use and look for Energy Star products.

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Comments (1)

  1. Submitted by Aaron Petty on 10/29/2008 - 12:06 pm.

    Wow! I will be sure to use Monopoly money next time at the Target checkout. That should be worth a hefty return!

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