Taubman Centers Says Purchase by Simon Property Still On

Taubman Centers says its shareholders approved its acquisition by Simon Property Group.
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Taubman Centers  (TCO) - Get Report said Thursday its shareholders approved its acquisition by Simon Property Group  (SPG) - Get Report, despite Simon's recent move to terminate the $3.6 billion agreement.

Shares of Taubman, Bloomfield Hills, Mich., at last check were off 0.6% at $37.90, while Indianapolis-based Simon Property was down 2.3% to $63.63.

Earlier this month, Simon Property Group, the biggest U.S. shopping mall operator, said it was scrubbing its offer to acquire Taubman, charging it had failed to take "essential steps" to lessen the impact of the coronavirus pandemic.

"Taubman continues to believe that Simon’s purported termination of the merger agreement is invalid and without merit, and that Simon continues to be bound to the merger agreement and to consummate the transactions," Taubman said in a statement.

On Thursday afternoon, a circuit court judge in Michigan referred the case to facilitative mediation to be completed by July 31. 

"This case shall be trial ready by mid-November 2020," the order said.

Taubman said it rejected Simon’s allegations and sought "specific performance of Simon’s obligations under the merger agreement, including Simon’s obligation to consummate the transactions, as well as other relief."

Among other complaints, Simon Property Group said the coronavirus outbreak "has had a uniquely material and disproportionate effect on Taubman compared with other participants in the retail real estate industry."

In addition, Simon Property Group said that "Taubman has failed to take steps to mitigate the impact of the pandemic as others in the industry have, including by not making essential cuts in operating expenses and capital expenditures."

Taubman said in its statement that it "stands ready, willing and able to close the transactions with Simon on June 30, 2020, the third business day following the satisfaction of all conditions precedent, which is the timeline required by the merger agreement." 

"Given Simon’s purported termination of the merger agreement and the pending litigation, it appears that Simon will not consummate the transactions on June 30, 2020, despite Simon’s contractual obligation to do so," Taubman said.