The battle for the board of Target Corp. continued Tuesday when the retailer shot down a proposal to put the candidates from the retailer and activist investor William Ackman on a single “universal proxy card.”
This story first appeared in the April 22, 2009 issue of WWD. Subscribe Today.
As it stands now, shareholders at the May 28 annual meeting will have the company’s nominees on a “white” proxy and Ackman’s on a “gold” proxy. Ackman controls 7.8 percent of the company’s stock through his Pershing Square Capital Management.
Ronald Gilson, one of Ackman’s nominees and a professor of law and business at Stanford Law School, advocated in a letter to the retailer for a proxy that would include all of the nominees.
“Target and Pershing Square now have the opportunity to proactively provide good corporate governance to the Target shareholders by making it convenient for them to make a choice in what, in the end, is their election,” said Gilson in the letter, filed with the Securities and Exchange Commission.
In response, Target said the proposal at this point would lead to confusion and delay.
“Shareholders have a clear choice between our independent nominees on our white proxy card and Bill Ackman’s slate on Pershing Square’s gold proxy card,” the retailer said.
Shares of Target rose 2 percent to $38.74 Tuesday, underperforming the S&P Retail Index, which advanced 2.8 percent, or 9.07 points, to 328.86.
Also on the rise were Men’s Wearhouse Inc., ahead 6.7 percent to $18.75, and Jos. A. Bank Clothiers Inc., up 2.1 to $38.75, after J.P. Morgan Chase & Co. analyst Brian Tunick took a more bullish stance on both companies.
Tunick raised his 2009 earnings estimate on Men’s Wearhouse to 75 cents a share from 58 cents and noted the company has cut back on its expenses to counteract pressure to merchandise margins. The analyst also raised his 2009 estimate for JAB to $3.25 from $3.06 and said the company has been successfully using promotions to drive traffic into its stores.