Target to nominate directors up for re-election

MINNEAPOLIS -- Target Corp. said Monday it will nominate for re-election all four of its current directors whose terms are expiring this year, adding it is "disappointed" that one of its investors intends to nominate its own slate.

The announcement comes after activist hedge fund manager William Ackman -- who owns a nearly 10 percent stake in the company -- said he plans to nominate five directors to the company's board at its annual shareholder meeting in May.

Ackman, the founder and chief executive of Pershing Square, has said the stock was undervalued. Shares have dropped as much as nearly 60 percent from a high of $59.55 during the past year. The company has suffered from a drop in consumer spending, while other discount chains -- particularly rival Wal-Mart Stores Inc. -- have outperformed.

Target said it considered nominating Ackman and one other individual suggested by Pershing Square to its board, but "after careful consideration" the company decided against it.

"We are disappointed that Pershing Square has decided to pursue a costly and disruptive proxy contest, especially in light of our previous dialogue," the company said in a statement.

Target said it will nominate for re-election Mary N. Dillon, global chief marketing officer at McDonald's Corp., Richard M. Kovacevich, chairman of Wells Fargo & Co., George W. Tamke, partner at Clayton, Dubilier & Rice Inc. and Solomon D. Trujillo, CEO of Telstra Corp.

"The board firmly believes that the re-election of these directors is in the best interest of Target shareholders," the company said.

Target shares rose 71 cents, or 2.5 percent, to $29.54 in electronic after-hours trading. During regular trading, the shares fell $1.14, or 3.8 percent, to close at $28.83.