Indiana’s Simon Property Group to Acquire 80% Ownership in Bloomfield Hills’ Taubman Centers

Simon Property Group Inc. in Indiana will acquire an 80 percent ownership in The Taubman Realty Group Limited Partnership through a definitive agreement between Simon and Bloomfield Hills’ Taubman Centers Inc.
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AMC Star Great Lakes 25 at Great Lakes Crossing
Simon Property Group Inc. will acquire an 80 percent ownership in The Taubman Realty Group Limited Partnership. Great Lakes Crossing Outlet (pictured is the mall’s AMC Star Great Lakes 25 movie theater), is a Taubman property. // Photo courtesy of Taubman Centers Inc.

Simon Property Group Inc. in Indiana will acquire an 80 percent ownership in The Taubman Realty Group Limited Partnership through a definitive agreement between Simon and Bloomfield Hills’ Taubman Centers Inc.

Locally, Great Lakes Crossing Outlets in Auburn Hills and Twelve Oaks Mall in Novi are Taubman properties. Simon properties include Birch Run Premium Outlets and Briarwood Mall in Ann Abor.

Simon, through its operating partnership, Simon Property Group L.P., will acquire all of Taubman common stock for $52.50 per share in cash, and the Taubman family will sell about one-third of its ownership interest at the transaction price and remain a 20 percent partner in Taubman Realty.

“Since Taubman Centers’ founding 70 years ago, we have built a portfolio of high-quality assets and continuously adapted to the evolving retail landscape,” says Robert S. Taubman, chairman, president, and CEO of Taubman. “I am proud of all that this company’s talented employees have achieved and am thrilled to have the opportunity to join together with Simon through this joint venture. Over the last few years, David and I have developed an excellent personal relationship and, importantly, Simon shares our commitment to serving retailers, shoppers and the communities in which we operate. The board and I are confident that Simon is the ideal partner to help us build on our progress.”

Taubman Realty is engaged in the ownership, management, and/or leasing of 26 super-regional shopping centers in the U.S. and Asia. Its ownership includes 21 retail assets in the U.S. and three in Asia. It will continue to be managed by its existing executive team under the leadership of Taubman. The parties have agreed to work together to implement best practices to achieve operational efficiencies and will eliminate Taubman’s public company costs immediately following closing.

“By joining together, we will enhance the ability of TRG to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers, and substantial new job prospects for local communities,” says David Simon, chairman, president, and CEO of Simon. “I look forward to partnering with Bobby and the TRG executive team in this exciting new joint venture.”

The transaction has been unanimously recommended by a special committee of independent directors of Taubman and approved unanimously by the boards of directors of both companies. Simon expects to fund the total required cash consideration of about $3.6 billion with existing liquidity.

“The Taubman board of directors has always been focused on maximizing shareholder value,” says Myron E. Ullman, lead director of the Taubman board of directors and chairman of the special committee of the board. “With this transaction, we will deliver a significant, immediate cash premium to shareholders. The special committee of the board unanimously believes that this transaction with Simon is a great outcome for all of our stakeholders.”

Required approvals for the transaction include two-thirds of the outstanding Taubman voting stock and a majority of the outstanding Taubman voting stock not held by the Taubman family. The family, which represents about 29 percent of outstanding Taubman voting stock, has agreed to vote in favor of the transaction. The transaction is also subject to customary closing conditions and is expected to close in mid-2020.

Today’s deal is a stark contrast to 2003, when Simon Property Group, along with Westfield America, tried to undertake a hostile bid of Taubman Centers. The takeover was scuttled after the Michigan legislature passed a bill, which was later signed by then-Gov. Jennifer Granholm, that changed the state’s takeover laws.

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