It was only a couple of years ago when investors were fighting for credit card companies and owning one seemed to be a necessity. Now, with many banks no longer viable acquirers for these assets because of their shaky financial conditions due to investments in subprime mortgages, Target Corp. said Wednesday it has decided to take more time and evaluate whether it will sell its credit card assets.
Continue reading below
The discount retailer originally said it would sell its credit card assets, which total around $7 billion in receivables, by December. Credit card assets have also lost their allure because some fear that with a recession looming consumers may fall behind in their payments to their credit cards or even default. Target activist investor William Ackerman, whose company Pershing Capital bought a 9.6% stake in the discount retailer in July, has been pushing for more shareholder value and is a proponent for the divestment of the credit card business. — Gerald Magpily
See Reuters article
See TheDeal.com (Sept. 13): Target may cut credit card business
