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Another Big Holder Joins Chorus of Objection to Kmart Stock Plan

NEW YORK -- Opposition to Kmart Corp.'s target stock proposal continues to grow as another institutional shareholder, the California Public Employees Retirement System, saidThursday that it will vote against the plan.<BR><BR>CalPERS, a pension fund,...

NEW YORK — Opposition to Kmart Corp.’s target stock proposal continues to grow as another institutional shareholder, the California Public Employees Retirement System, saidThursday that it will vote against the plan.

CalPERS, a pension fund, owns 2 million shares of Kmart stock. The fund said the plan to sell off stock for each of its specialty divisions could eventually dilute its holdings and deter management from considering other alternatives. CalPERS said it will also vote against the reelection of Kmart board members.

The fund joins other shareholders in its opposition to the plan, including the College Retirement Equities Fund, the State of Wisconsin Investment Board, the Florida State Board of Administration, the Ohio Teachers Retirement System and the Amalgamated Clothing & Textile Workers Union.

Kmart plans to sell 20 to 30 percent stakes in its specialty retail divisions: Builders Square, Borders-Walden, OfficeMax and Sports Authority. Kmart shareholders will vote on the proposal today at the annual meeting in Troy, Mich.

Kmart stock closed Thursday at 15 1/2, up 1/2, on the New York Stock Exchange.