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Target (TGT) - Get Free Report jumped 3% late Wednesday after the retailer confirmed it is shopping its credit card arm.

The statement by the Minneapolis-based discounter came on the same day that

reported the company had decided to monetize the credit card business.

The shift comes just two months after activist investor Bill Ackman's Pershing Square took a big stake in Target.

News of the planned sale or spinoff sent Target shares up 92 cents in regular action Wednesday. Shares surged an added $1.58 to $64.30 in after-hours trading, after the company confirmed it had begun the sale process.

Target said after the market closed Wednesday that it hired Goldman to review ownership alternatives for its $7 billion of credit card receivables.

The company said the review would be "focused on the economics of possible alternatives and will include, but not be limited to, an examination of possible differences in growth rates and credit risk exposure between the current direct ownership model and other possible ownership structures, the cost of debt and equity capital to fund our receivables, and current and future liquidity considerations."

Last week, finance chief Doug Scovanner told investors at a Goldman Sachs retail conference that Target would consider exploring strategic alternatives for its real estate and credit portfolio, as long as any possible deals don't disrupt its relationship with customers. Target has held onto its card business even as rivals like


(KSS) - Get Free Report




have sold theirs.

Target's shift comes less than two months after William Ackman's Pershing Square Capital revealed a 9.6% stake in the nation's second-largest discount retailer. Pershing's nearly $2 billion stock purchase kindled speculation that the firm would look to pressure Minneapolis-based Target to shed its credit card operations and real estate portfolio to focus on retailing.

Want more? Check out TV video. Jim Cramer and Mark DeCambre discuss a possible sale of Target's credit card operation.

Last year, Target told

The Wall Street Journal

that it was not willing to shed its credit card business. During its most recent earnings report, the retailer reiterated the importance of its credit cards, whose pretax earnings rose 34% from a year ago in the second quarter.

While Target has changed its tune, it's possible that more is behind the shift than interest from hard-charging activist Ackman. Observers note the deteriorating credit environment.