Oct. 4 (Bloomberg) -- Sears Holdings Corp., the largest U.S. department-store chain, rose as much as 4.3 percent in New York trading after hedge-fund manager William Ackman disclosed that he holds a 5 million share stake in the retailer.

Ackman, the 41-year-old president of Pershing Square Capital Management in New York, confirmed the purchase in an e- mail yesterday. He didn't say why he bought the shares. He earlier disclosed the stake at a charity event this week in Dallas.

Last year Ackman thwarted Sears Chairman Edward Lampert's efforts to take full control of Sears Canada Inc., saying the price was too low.

Sears stock gained $4.81, or 3.5 percent, to $143.09 at 10:34 a.m. New York time in Nasdaq Stock Market trading. It is headed for a seventh straight daily advance, the best winning streak since May 2005. The shares declined 18 percent this year through yesterday.

``We have no comment at this time,'' Ackman said in an e- mail today after a request for more details.

Ackman's holdings would make him the fourth-largest shareholder in Hoffman Estates, Illinois-based Sears, according to Bloomberg data. Sears is the largest U.S. department-store chain based on sales, ahead of Macy's Inc.

Bid Rejected

In November Sears Canada shareholders rejected an C$888 million bid (worth $781 million) from Sears to acquire the 46 percent of the company it didn't already own, deeming the price too low.

Ackman had accused Lampert of trying to bully investors into approving the deal and asked Ontario regulators to reject the acquisition.

Sears Canada shares gained 11 percent this year through yesterday. Ackman is the company's second-largest shareholder.

Ackman bought a stake in Target Corp., the second-largest U.S. discount chain, in July and said he plans to meet with executives to discuss ways to boost the share price. He controls a 9.6 percent stake through equity and options, according to regulatory filings.

Ackman has used investments in companies such as McDonald's Corp. to press executives to cut spending and sell property or divisions. Ackman didn't specify what actions he proposed for Target, although analysts including Adrianne Shapira of Goldman Sachs Group Inc. in New York said he'd likely urge managers to sell the company's credit-card unit as well as property.

Last month, Target said it was reviewing a potential sale of its $7 billion credit-card portfolio. The following day, McDonald's said it boosted its dividend by 50 percent.

To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net; Nick Baker in New York at nbaker7@bloomberg.net.

Last Updated: October 4, 2007 10:37 EDT