With his fortunes sinking along with Target Corp.'s stock price, activist investor William Ackman said he will unveil a "potential transaction" today that he believes will pump up shares and build long-term value for shareholders.

It's an aggressive move for Ackman, whose Pershing Square Capital Management hedge fund owns a nearly 10 percent stake in Minneapolis-based Target.

The announcement will be aimed at trying to build support among shareholders, perhaps after getting a lukewarm response to his ideas from Target management.

Ackman did not specify the nature of his proposal. But Target said Tuesday that it has been talking with Ackman since May about an "alternative ownership structure" of its real estate.

Target owns 85 percent of its 1,684 stores, as well as its headquarters and distribution centers. Ackman has said the stock price doesn't reflect the value of that land, and has said he wants to unlock that value. Possibilities could include selling the land and leasing it back or setting up real estate investment trusts.

Ackman also may want Target to change the pace of its $10 billion share repurchase plan, announced last November. Target has repurchased about 93 million shares, about 11 percent of its outstanding shares, for $4.8 billion, or $51.70 per share.

Target said it remains open to ideas, but has told Ackman it has "serious concerns on a number of important issues."

"We respect the spirit with which these ideas were presented, and will share our perspective with the financial community in the near future," Target Chief Executive Gregg Steinhafel said in a statement.

Customers vs. shareholders

Ackman has a lot at stake in trying to elevate Target's stock price. Wall Street gave him a boost Tuesday, as shares rose almost 18 percent to $38.51 in a market in which many stocks surged on bargain-hunting.

Ackman began buying up Target stock in April 2007, in a fund created specifically to invest in Target, and eventually paid $2.5 billion for his stake. At the time, Target was trading between $58 and $66 a share.

Since then, Target stock has fallen to as low as $32.69 -- Monday's closing price. Ackman is in a precarious spot because his stake includes a majority of call options instead of common stock. If Target's price stays below $34.63, Ackman's options are worth less than the cost of exercising them, according to filings.

Target has bent to Ackman's wishes before. In what is seen by some analysts as a compromise, the company agreed to sell half of its profitable credit-card receivables to J.P. Morgan Chase for $3.6 billion in May, after months of resistance.

In an all-day conference with analysts last Thursday, Target reiterated a long-held stance that owning its land is a key strategic advantage because it allows the retailer to control every aspect of its operations, including building and designing new stores as well as remodeling and upgrading stores to its liking.

Target's real estate holdings, which include stores, distribution centers, and its headquarters in downtown Minneapolis, could be worth $28 billion, according to an estimate in February by New York-based hedge fund Kinnaras Capital.

"There's no upside for Target in leasing their real estate," said Jim McComb, a Minneapolis real estate consultant who worked for Target's predecessor Dayton Corporation from 1968 to 1974 and has researched economic benefits of anchor stores to shopping centers.

"This is a way for a current set of shareholders to transfer wealth from future shareholders, to the long-term detriment of the corporation," McComb said. "The only reason Ackman wants to do this is to have a special dividend declared. And having taken the money, he leaves Target to go on his merry way, leaving it with a new set of problems down the road."

Retail consultant and former Target buyer Stan Pohmer noted that while both Ackman and Target want to see a healthy stock price, they come to the table with different mindsets.

"This puts Target in a tenuous position as to what's in the best long-term interest of the company," Pohmer said. "If you're a manager, you're faced with answering the demands of Wall Street vs. those of your customers -- who are also stakeholders. Not that one's right and one's wrong, but the activities that take place in response to those, in some cases, are a detriment to each other."

Staff writer Patrick Kennedy contributed to this report. Jackie Crosby • 612-673-7335