Simon Property moving forward on Taubman merger
Five months after breaking off talks to buy rival mall operator Taubman Centers, Simon Property Group Inc. announced that the two have reached a definitive agreement to move ahead with the merger, after modifying certain terms of the agreement.
The parties agreed to reduce the merger price to $43 per share in cash — down from the original $52.50 per share — which will drop the original sale price of $3.6 billion. That modification responds to the effect that the COVID-19 pandemic had on Taubman’s operations, Simon Property claimed in a lawsuit filed in June.
The modified merger agreement continues to provide that Simon will acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership. The Taubman family will sell approximately one-third of its ownership interest at the transaction price and remain a 20% partner in TRG.
The retail giants have properties worldwide, including Plaza Carolina, a Simon property, and The Mall of San Juan, which Taubman opened in 2015. Both shopping centers remained closed for several months after the local government imposed lockdown conditions to curb the spread of the COVID-19 pandemic.
Both shopping centers reopened on June 1, when the government began allowing businesses to resume economic activity after about 10 weeks of lockdown.
“The Boards of Directors of Simon and Taubman, including the Special Committee of independent directors of Taubman, have approved the terms of the transaction. The modified merger agreement provides that Taubman will not declare or pay a dividend on its common stock prior to March 1, 2021, and then, only subject to certain limitations and conditions,” Simon Property said in a press release.
The merger is expected to close in late 2020 or early 2021, subject to Taubman shareholder approval and customary closing conditions.
Simon and Taubman also have settled their pending litigation in the Circuit Court for the 6th Judicial District in Michigan, which was filed in June 2020, as this media outlet reported.