Target Corp shareholders reelected its four incumbent directors, the retailer said on Thursday, dealing a defeat to activist investor William Ackman, who launched a heated proxy contest seeking five seats on its board.

The company also said shareholders voted to set the board size at 12, as the company wanted. The retailer made the announcements at its annual meeting.

Ackman's Pershing Square Capital Management has a 7.8 percent stake Target and was seeking to win five seats on the retailers board.

He launched his proxy contest in March after Target rejected his proposal to spin off the land under its stores into a real estate investment trust to boost its stock price.

He has since said that he is running the proxy contest in order to add executives to Target's board that have expertise in credit cards, real estate and food retailing.

But Target contends he is seeking the seats simply as a way to push through his risky real estate transaction.

Ackman's slate consisted of himself; Jim Donald, former CEO at Starbucks Corp ; Richard Vague, the former CEO of Visa credit card issuer First USA; Michael Ashner, chairman of Winthrop Realty Trust; and Ronald Gilson, a corporate governance expert.

Target was seeking to reelect Mary Dillon, a marketing executive at McDonald's Corp , George Tamke, a partner at private-equity firm Clayton, Dubilier & Rice, Richard Kovacevich, chairman of Wells Fargo & Co , and Solomon Trujillo, who has resigned as CEO of telecommunications firm Telstra Corp.

Shares were down 55 cents at $39.05 in late trading on the New York Stock Exchange.

(Reporting by Nicole Maestri and Lisa Baertlein; Editing by Derek Caney)

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