Target to sell half its credit-card receivables
March 13, 2008,
Minneapolis – Target Stores said it is negotiating “with a credit partner” to sell about half of its credit-card receivables; the price will be $4 billion.
The $63 billion retailer noted that the proposed deal would satisfy the goals it announced in September last year, namely to provide cash from a non-debt source, while maintaining its credit card business.
The move stems in part from pressure exerted by Pershing Square Capital Management, which in July 2007 said it had acquired 9.6% of Target common stock; Pershing managing member William Ackman said he would suggest ways to “correct” the undervaluation of Target’s share price. Target then said it would work with Goldman Sachs to review its credit card business.
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