MINNEAPOLIS, Nov 21, 2008 (BUSINESS WIRE) -- Target Corporation (NYSE:TGT) disclosed today that after a comprehensive evaluation of various real estate structure ideas proposed by Pershing Square over the past six months, it has decided not to pursue them further. Following a thorough review of the transaction outlined by Pershing Square by members of Target management, Board of Directors and outside advisors, including Goldman Sachs, the company has concluded that the potential value created, if any, is highly speculative and insufficient to merit pursuit of a transaction given the costs, strategic and operating risks, and loss of financial flexibility related to executing the proposed transaction. These concerns are heightened in the current economic environment.

Analysis of the most recent Pershing Square idea revealed that concerns previously expressed by the company remain. These include:

-- The validity of assumptions supporting Pershing Square's market valuation of Target and the separate REIT entity,

-- The reduction in Target's financial flexibility due to the conveyance of valuable assets to the REIT and the large expense obligation created by the proposed lease payments, which are subject to annual increase,

-- The frictional costs and operational risks, including tax implications, of executing Pershing Square's ideas, and

-- The risk of diverting management's focus away from core business operations over an extended time period to execute such a complex transaction, particularly in the current environment.

One additional earlier concern, relating to the adverse impact the company believed the proposed structure would have on Target's debt ratings, borrowing costs and liquidity, has been partially addressed in the current version of Pershing Square's proposal, though we believe meaningful risk remains.

"Target has a strong record of engagement and open dialogue with shareholders over many years and we respect the spirit with which Pershing Square's real estate ideas were presented," said Gregg Steinhafel, president and chief executive officer of Target Corporation. "We gave these ideas a full and complete review, including numerous meetings between Pershing Square and Target senior executives and a meeting between Bill Ackman, the Managing Member of Pershing Square, and several members of Target's Board. Target does not share Pershing Square's perspective that execution of this proposed transaction will generate measurable shareholder value over time and believes the risks, particularly in light of the serious challenges facing our retail and credit card segments in 2008 and 2009, are significant. Both our Board and executive team remain firmly committed to generating value for our shareholders and expect to achieve this objective over the next 3 to 5 years through our continued, thoughtful focus on our current strategy and core business operations."

About Target

Target Corporation's retail segment includes large general merchandise and food discount stores and Target.com, a fully integrated on-line business. In addition, the company operates a credit card segment that offers branded proprietary and Visa credit card products. The company currently operates 1,684 Target stores in 48 states. Target Corporation news releases are available at www.target.com.

SOURCE: Target Corporation

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