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 Target Corp. (NYSE:TGT) CEO Gregg Steinhafel published an open letter to shareholders Thursday, appealing to them to elect the retailer's nominees to the board of directors at the May 28 shareholder meeting.The letter is the latest round in the standoff between Target and Pershing Square Capital Management LP's Bill Ackman. The activist hedge fund manager announced a proxy fight against Target last March and is seeking to replace five members of Target's 13-seat board at the meeting. Earlier this week, Ackman made the media rounds and held a town hall meeting Monday pressing his case for a board shake-up, saying the company's current nominees had no retail experience. Ackman's slate are former Starbucks Corp. (NASDAQ:SBUX) and Pathmark Stores Inc. chief executive Jim Donald, credit card industry veteran Richard Vague, real estate investor Michael Ashner and corporate governance expert Ron Gilson. Steinhafel's letter addressed the experience claims: "Target's nominees, Mary N. Dillon, Richard M. Kovacevich, George W. Tamke, and Solomon D. Trujillo, are an integral part of a successful Board and management team. We believe Pershing Square has presented no plan or strategy to justify a change in your Board or management team. It appears that Pershing Square has launched its proxy contest because Target rejected Pershing Square's risky real estate proposal after careful evaluation." The risky real estate proposal referred to was announced last November by Ackman. He wanted Target to form a real estate investment trust that would own the land under their stores and spin off 20% of that REIT in an initial public offering. Target rejected this idea. In a column for The Deal, Harvard Business School professor and former Target board member Bill George wrote of Ackman's proposed real estate and credit card spinoffs for Target: "His proposals ignored the lessons of failed retailers like Sears, K-Mart and Mervyn's that fell by the wayside after they made similar moves." Will both sides reach an agreement in the next two weeks, or are things starting to heat up? - Tom Groppe @dealscape: Follow me on Twitter See Target letter to shareholders See Bill George's column from TheDeal.com See Ackman's proxy from the SEC Edgar See related Target filing from SEC Edgar
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