Ackman says Target proxy not about him

(Reuters) - Hedge fund manager William Ackman introduced shareholders on Monday to his five nominees for the Target Corp (TGT.N) board, promising their expertise could make the retailer a better company.

"There is a lot to like, but that doesn't mean it can't be optimized," Ackman said at a town hall-style meeting in mid-town Manhattan.

While Target is well known for selling designer items, it is certainly not Gucci and the retailer, which sells the fashionable merchandise at discount prices, should be able to perform well even in difficult economic conditions, Ackman said.

For nearly two hours, the prominent investor, whose New York-based Pershing Square Capital Management owns a 7.8 percent stake in Target, downplayed fears he is only seeking a quick profit by launching this proxy contest and, instead, he played up the long resumes of his slate members.

"It's not about Bill Ackman. It's about how our directors compare with the existing nominees," Ackman said.

Target is Pershing Square's biggest single investment and Ackman lost a lot of money last year thanks to the retailer's poor performance.

Target's business faltered as shoppers, pressured by the recession, pulled back on buying trendy clothes and handbags and stuck to buying just the basics, such as food or medicine -- a trend that favored rival Wal-Mart Stores Inc (WMT.N). It is now trying to add more food to its merchandise assortment to lure shoppers into its stores more frequently.

But this year, Ackman is doing better, especially after the stock price jumped 45 percent since he announced his plan to replace four Target directors with five newcomers.

"We are the underdogs here," Ackman told about 150 people in the room and another 400 who registered to listen by webcast, according to Target's proxy advisers.

TOO CLOSE TO CALL

The outcome of this increasingly bitter proxy battle is too close to call since large shareholders such as State Street Global Advisors have not yet decided how to cast their votes before the May 28 annual meeting.

Ackman shared the stage with former Starbucks CEO Jim Donald; Richard Vague, the former CEO of Visa credit card issuer First USA; Richard Ashner, chairman and CEO of Winthrop Realty Trust; and Ronald Gilson, a law professor and corporate governance expert.

They sat in cherry red chairs -- mimicking Target's red bull's eye logo -- and answered questions about what they would do to help management perform better.

But Target has remained steadfast in defending its board members who are up for reelection.

"We believe that the four incumbent directors up for election are better qualified to serve the interests of shareholders than Pershing Square's nominees," a Target spokesman said.

Read more here