A hedge-fund manager’s plan to create “value” for Target Corp. by shuffling paper is getting a cool reaction from Wall Street, the Associated Press reports. Activist investor Bill Ackman wants Target to spin off its real estate into a separate entity, which would then lease the land back to Target. One analyst said Ackman’s proposal is creative but falls short of being convincing, adding that Target’s “well-respected management team” doesn’t support the plan.
Ackman, whose hedge-fund controls just under a 10 percent stake in Target, unveiled his proposal at meeting in New York Thursday. Evan Newmark of the WSJ Deal Journal blog writes that Ackman came off “maybe a bit too eager to show this is not Wall Street hocus pocus like all the CMOs and CDOs that have put our nation into the crapper.” One comment captured the skepticism about the plan: “Ackman is a hedge fund guy. He is running up the price as quick as possible so he can cash out in the near term.”
Northwest Airlines is now a subsidiary of Delta Air Lines. With the merger official, executives are focusing on combining operations. One airline consultant tells the Associated Press that airline mergers historically have been “like trying to integrate oil and water.” This one, however, might be “the poster child for successful airline mergers” because of all the work both airlines did in advance. Delta officials say customers will see little change.
Best Buy won’t be “jumping up and down” if rival Circuit City were to go under. “It would be a sad day for the industry,” COO Brian Dunn tells Reuters. But the Richfield-based electronics retailer would be jumping into the real estate market. Dunn said if competitors close stores, Best Buy would pursue vacant store fronts that make sense for the company. Meanwhile: A JPMorgan analyst upgraded Best Buy’s stock today.
Medtronic says it will start selling drug-coated stents with a popular delivery system that helps doctors thread them into heart arteries. But a legal fight over the system’s patent is unsettled, Dow Jones reports. An 8-year-old federal court injunction has prevented Medtronic from including the delivery system with its stents. A court ruled last week that the injunction expired Oct. 29, but rival Abbott Laboratories has filed a lawsuit attempting to stop Medtronic from using it in the United States.
Wired coffee drinkers can now download Caribou Coffee coupons to their mobile phones or wireless devices. The coffeehouse chain is partnering with a mobile coupon service called Cellfire Inc. After registering here, users can download coupons to their phones and show them at the register to receive the discount. The current deal: $1 off any large drink, or a free drink with purchase of a pound of coffee.
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