Price Chopper opens new store in Colchester, Vt.
SCHENECTADY, N.Y. Price Chopper announced Tuesday the opening of a new store in Colchester, Vt.
The store is a 20,000-square-foot former P&C at the corner of Porters Point and Prim roads. The opening ceremony included Price Chopper president and CEO Neil Golub, executive vice president and COO Jerry Golub, Colchester town manager Al Voegele and others.
“We are thrilled to introduce ourselves to the community of Colchester and surrounding communities,” Neil Golub said in a statement. “I am confident that consumers will appreciate the superior quality and value of what Price Chopper has to offer.”
Price Chopper’s Web site does not list the store as having a pharmacy.
Target proxy battle heats up as annual meeting approaches
NEW YORK It isn’t often that one of America’s premier retail companies finds itself the subject of a determined battle for management control by a disgruntled shareholder. That’s especially true for a retail giant with an enviable track record, a highly regarded management team and a resoundingly successful niche strategy.
Nevertheless, that’s the scenario facing Target’s top managers when they convene the company’s annual meeting of shareholders May 28. The event, to be staged at a Target store in Waukesha, Wis., promises a showdown between the current directors of the 1,698-store upscale discount chain and William “Bill” Ackman, a venture capitalist who is founder and CEO of investment and hedge fund firm Pershing Square.
For president and CEO Gregg Steinhafel and other senior brass, a proxy fight with an activist and very vocal major shareholder has to be an uncomfortable and unfamiliar scenario. Target’s managers like to fly under the radar, and their annual meetings are usually characterized as brief, sparsely attended, low-key events with little or no controversy.
This year’s meeting may hold enough drama to raise both the attendance level and the time limit. It’s unclear at this point how Ackman will proceed or state his case at the meeting, although it’s certain both sides are working to line up support from outside Target investors.
Ackman’s bid to stack the board with as many as five directors isn’t just a meaningless gesture from some small-stake gadfly investor with a few hundred shares of stock. Pershing Square is reported to hold some 10% of Target’s total common shares — a powerful club to wield in any fight for board representation.
That doesn’t mean Ackman will prevail; he most likely won’t. Outside agitators trying to shake up the boards of generally well-regarded companies to wring more value out of both the corporate assets and their own stockholdings don’t usually win such battles with entrenched management and boards, Carl Icahn notwithstanding. But Ackman’s influence and his appeal to uncommitted shareholders could conceivably win a concession or two from the existing board, or at least another hearing.
And what if Ackman does capture seats on the board, either late this month or in the future? It may mean little to the average Target customer. Ironically, it isn’t Target’s retail strategy, its niche marketing capabilities vis-a-vis Wal-Mart, or its merchandising prowess that the Pershing Square founder apparently disagrees with; indeed, Ackman in the past has strongly endorsed the company’s leadership and retail vision. What the investor says he really wants is a way to get Target to unlock what he describes as the unrealized value inherent in the company’s assets, notably in the real estate it owns underneath its stores, and the credit card business it generates.
Late this month, Target’s unaffiliated shareholders will get a chance to tell Steinhafel what they think of that idea.
Rite Aid shares climb above $1 — major hurdle cleared for No. 3 drug chain
NEW YORK Rite Aid has been fighting off the delisting of its shares trading on the New York Stock Exchange since September, and although the company had the approval of its investors to execute a reverse-split in its back pocket, certainly that was a card management didn’t want to play if it could avoid it.
Analyst opinion is split on the reverse-split. There are those that believe that the move, by instantly inflating the price per share, can make the stock more attractive to some investors, particularly, institutional investors who tend to shy away from stocks that trade under a certain price. But the result is purely cosmetic and certainly doesn’t change the fundamentals of a company.
“Reverse stock splits are often used by companies that realize that having a low stock price is optically not very attractive,” RBC Capital Markets analyst Gerard Cassidy told The New York Times in March regarding a potential Citigroup stock split. “It does not pretend to say that the company has improved but optically it looks better on investors’ screens or in the newspaper.”
Others believe that the reverse-split sends a negative message to investors, one of desperation. “Investors typically freak out over reverse stock splits,” noted The Motley Fool in a May 6 report on General Motors’ planned reverse split. “There are a few success stories — like priceline.com — but most of the reversers — Sun Microsystems, for instance — are trading lower today.
“On paper, it shouldn’t make a difference,” Rick Aristotle Munarriz, a regular Motley Fool contributor, continued. “It’s an even exchange. However, just as investors often bid up companies that declare forward stock splits based on optimistic assumptions, it’s only natural to coat reverse stock splits with pessimistic assumptions. Until we get a few more Pricelines in the winner’s circle, that is unlikely to change.”
The best news for Rite Aid is that for now, it does not have to test Wall Street’s theories on the reverse-stock split. Back in March, NYSE issued a temporary suspension of its minimum share-price listing rule, giving Rite Aid more time to regain compliance. Under the terms of the agreement to suspend NYSE’s minimum listing rule, at this point Rite Aid must maintain an average closing price of $1 for the 30 day-period ending June 30.
So far so good for Rite Aid, since its shares climbed back above $1 in May 11 trading. Its shares closed that day at $1.06, and reached a high for the week of $1.15 the following day. Its shares slipped a bit Wednesday and Thursday, closing at $1.09 and an even $1, respectively, and finished the week at $1.04.