Simon and Taubman reach a new merger deal

Takeover deal allows the companies to avoid a court battle

National /
Nov.November 16, 2020 08:53 AM
David Simon of Simon Property Group and Robert Taubman of Taubman Centers  (Getty)

David Simon of Simon Property Group and Robert Taubman of Taubman Centers (Getty)

The long-in-the-works merger between Simon Property Group and Taubman Centers is finally coming to fruition.

Michigan-based Taubman has agreed to take a price cut in Simon Properties’ buyout of the company, allowing the two to avoid pending litigation.

Simon, the country’s largest mall owner, will pay $43 a share for Taubman under the new deal, down from the original price of $52.50. Taubman has also agreed not to declare or pay a common stock dividend before March 2021, the Wall Street Journal first reported.
The companies were expected to go to court this week, the Journal reported.

Under the new terms of the takeover, the Taubman family will sell about one-third of its interest, remaining a 20 percent owner. Simon will acquire an 80 percent ownership interest, according to a press release.

The new deal means Simon receives a nearly 20 percent discount and savings of close to $800 million.

The two companies have danced around a deal for years. Simon first attempted a hostile takeover of Taubman in 2003. They finally reached an agreement in February that would have given the former control of the latter, but when malls shuttered and retail revenue plummeted due to the pandemic, Simon attempted to back out of the deal, claiming that Taubman did not sufficiently mitigate the impact of the pandemic.

Taubman, which operates high-end malls throughout the country, countered by saying it would sue Simon and force the company to complete the merger.

“Taubman believes that Simon’s purported termination of the merger agreement is invalid and without merit, and that Simon continues to be bound to the transaction in all respects,” the company said in a statement after it announced its intent to take the matter to court.

The companies were expected to head to court this week, the Journal reported, but the new deal allows them to avoid a lengthy court battle.

The merger is expected to close in late 2020 or early 2021, subject to Taubman shareholder approval and customary closing conditions.






    Related Articles

    arrow_forward_ios
     JLL CEO of capital markets Richard Bloxam and Roofstock CEO Gary Beasley (JLL, Roofstock, iStock)
    JLL gets in rental home business
    JLL gets in rental home business
    Target CEO Brian Cornell. (Getty)
    Internet, shminternet: Target adds, renovates stores as money pours in
    Internet, shminternet: Target adds, renovates stores as money pours in
    (iStock/Illustration by Alexis Manrodt for The Real Deal)
    Order up: Real estate investors line up to buy drive-throughs
    Order up: Real estate investors line up to buy drive-throughs
    (Getty)
    Hotel stocks went bonkers in February
    Hotel stocks went bonkers in February
    Homebuilding is largely responsible for the increase in construction spending. (Getty / Photo Illustration for The Real Deal)
    Construction spending hits new record in January
    Construction spending hits new record in January
    (iStock/Illustration by Kevin Rebong for The Real Deal)
    These are real estate executives’ worst worries for 2021
    These are real estate executives’ worst worries for 2021
    WeWork CEO Sandeep Mathrani, Adam Neumann and SoftBank CEO Masayoshi Son (Getty/Illustration by Kevin Rebong)
    WeWork and SoftBank settle lawsuit
    WeWork and SoftBank settle lawsuit
    Century 21 president Marc Benitez (LinkedIn; iStock)
    Return of the retailer: Century 21 relaunches
    Return of the retailer: Century 21 relaunches
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...