Target Not Biting? Why Not Buy GGP?

After proposing that Target’s real estate gets folded into a REIT and getting rejected, Pershing Square Capital Management has now turned its sights to General Growth Properties.

The website-less fund, managed by William Ackman, has now apparently acquired a 20% interest in the mall owner. In a Bloomberg article, Merrill Lynch analysts say it “is the first sign that any investor has expressed a strong interest in the company or sees significant value beyond the mountain of debt.”

Should Target Have a REIT Spin Off?

William Ackman, a 10% shareholder of the discounter, thinks so. The head of Pershing Square Capital Management is proposing that Target spin off its company-owned stores and land into an Inflation-Protected REIT.

Its real estate would then enter a 75-year triple-net-lease-deal for the stores. Ackman says TIP REIT, as he calls it, would be the largest of its kind, with its $27.5-billion market value eclipsing Simon Property Group’s $20.8 billion.

Who Will Take Borders?

Yesterday Borders Group management announced that the bookseller is up for sale. A “difficult economic environment” has spurred executives to consider strategic alternatives, they said.

We find it interesting considering that the company had a pretty good quarter, at least compared to how some retailers are faring lately. Same-store sales at Borders stores rose 2.1% year over year during the fourth quarter, while even Waldenbooks, its quickly vanishing mall chain reported a 1.2% increase. Profits were only slightly down from a year ago, at $84.7 million compared to $87.7 million. Plus, the chain is even rolling out a new prototype.