Ackman Aims at Target's Land

But one M&A advisory executive says that Target's case is more challenging because there may not be natural buyers for Target's stores. With Wendy's and McDonald's, for example, other franchisers served as logical investors. In Target's case, buyers might be more difficult to identify, the executive says.

Nonetheless, Ackman could be eyeing a sale-leaseback transaction for Target, industry experts say. In such a deal, an asset-heavy company sells properties, creates cash and takes on lease obligations for future rents.

"A lot of companies, especially retail companies, have embraced the concept of sale leaseback," says Edward LaPuma, a managing director with W.P. Carey(WPC Quote), a major provider of sale-leaseback financing.

One of the largest retail sale-leasebacks came when Kohlberg Kravis Roberts teamed up with Vornado Realty Trust(VNO Quote) and other partners to purchase Toys-R-Us in 2005. Since Target owns so much of its real estate, it would probably be a good candidate for a sale-leaseback situation, LaPuma says.

Despite this seemingly obvious real estate angle, the fact that Target is so widely respected as a retailer makes Ackman's campaign puzzling to industry veterans.

"I think it is an unusual example, because you usually focus on companies that are performing below their peer group from an operation standpoint or are inefficient in their use of capital. Target does not appear to meet either of those two criteria," says Randy Lampert, managing director of Morgan Joseph, who has written a study on shareholder activism.