Simon Property Group, Taubman Centers Set $43 Per Share Merger Price

Simon Property Group, Inc. and Taubman Centers, Inc. have changed their merger price to $43 per share in cash, according to a press release from Simon.

The combination is anticipated to close late this year or early next year, “subject to Taubman shareholder approval and customary closing conditions,” according to the release.

Taubman and Simon have also settled their pending litigation in the Circuit Court for the 6th Judicial District, Oakland County, Michigan.

A reworked merger deal continues to provide that Simon will buy an 80 percent ownership interest in The Taubman Realty Group Limited Partnership (“TRG”). The Taubman family will sell roughly one-third of its ownership share at the transaction price and will still be a 20 percent partner in TRG.

Simon’s and Taubman’s boards of directors, including Taubman’s special committee of independent directors, have given the green light to the terms of the deal.

The updated merger deal provides that Taubman will not set or pay a dividend on its common stock before March 1 of next year, and then only subject to some restrictions and conditions.

Taubman Centers is involved in the supervision, ownership and/or renting of 26 mall properties in Asia and the United States.

In June, Simon Property Group, Inc. said it had “exercised its contractual rights” to terminate its Feb. 9 merger deal with Taubman Centers, Inc. At the time, Simon filed an action against Taubman Centers, Inc. and The Taubman Realty Group Limited Partnership in the Circuit Court for the 6th Judicial Circuit of Oakland County, Michigan. It sought a declaration that Taubman experienced a “material adverse event” under the merger deal and had contravened the covenants in the merger deal “governing the operation of Taubman’s business.”

“First, the COVID-19 pandemic has had a uniquely material and disproportionate effect on Taubman compared with other participants in the retail real estate industry. Second, in the wake of the pandemic, Taubman has breached its obligations, which are conditions to closing, relating to the operation of its business,” Simon said in a June release.