Pershing Square's Bill Ackman Finishes His Target (TGT) Spin Off Speech

Pershing Square's William Ackman proposed that Target Corp (NYSE: TGT) should spin off a separate company that would own the land on which its stores are built into a REIT, called TIP REIT. Ackman said Target would then be able to lease the buildings for 75 years under the proposal.

Ackman's fund currently owns just under 10% of Target's shares. Target is trading up after the presentation along with the rest of the market.

Target would produce lower margins because it would pay rent, but its return on invested capital (ROIC) would be a lot higher.

Target has been made aware of most parts Ackman's proposal.

Target responded by saying it was reviewing ideas raised by Pershing and hired Goldman Sachs as an adviser, but noted the proposals raised "serious concerns on a number of important issues."
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