The Nominees for Shareholder Choice, better known as the Pershing Square Capital Management's dissident director slate, have taken aim at Target's board in the run-up the May 28 AGM. The nominees have issued a public letter spelling out 11 concerns including accusations of board cronyism, lack of experience, misleading shareholders and more.

There's a lot at stake, particularly for activist investor William (Bill) A. Ackman whose Pershing Square Capital Management owns a 7.8% stake in Target through a mixture of equity and options.  In June 2007 the New York Post reported that Ackman had raised "an eye-popping $2 billion "single purpose" fund that would have just one holding", Target.

Pershing's contention is that  Target’s current board lacks sufficient experience in food retailing, real estate, and credit cards; and that the land on which Target’s stores are built should be spun off into a REIT. Target is strongly resisting the claims. Ackman is no stranger to this style of activism having previously taken positions in  Wendy's International Inc., McDonald's Corporation and Ceridian Corp.,  pressuring management to improve profits by cutting costs or selling divisions.

The fight is set to turn nasty today according to NY Times blog, DealBook which has obtained a copy of a Target presentation aimed at undermining the qualifications of Pershing Square nominees. SEtting aside the mud-slinging, the mechanics of the director elections is going to prove trick for shareholders due to the fact that the directors are not all on the same ballot card or "Universal Ballot" as the US market calls it. Broadridge, the dominant proxy distribution company, has claimed it would take them over 6 months and 21,000 man hours  to be able to accomodate a universal ballot card. That is clearly going to jar with European shareholders and registrars as a universal ballot is taken as read. Manifest's US partners, ProxyGovernance Inc (PGI),  is recommending that shareholders vote using the dissident ballot card to ensure that their choices are accepted.

PGI is recommending a vote in favor of two of the five nominees proposed by Pershing Square, noting that their professional experience is directly relevant to certain strategic challenges the company faces, which seem to be under-represented in the board as currently composed. Jim Donald, who established Wal-Mart’s grocery business and superstore presence, and Michael Ashner, who has extensive professional experience in commercial real estate, would, in PGI's view add weight to the board’s and help them meet emerging strategic challenges in these two aspects of the company’s operations.

Whatever the outcome, the Target/Pershing proxy fight is estimated to be one of the most expensive corporate battles ever with suggestions that both sides will have spent more than $10 million each on their respective campaigns.