Simon Property to Buy Taubman Centers in $3.6B Deal

Taubman owns, manages, or leases 26 shopping centers in the United States and Asia.
Lauren MuskettFebruary 10, 2020

Top U.S. mall operator Simon Property Group agreed to buy Taubman Centers in a deal valued at $3.6 billion.

Under the agreement, Simon will buy an 80% stake in the Taubman Realty Group (TRG), the entity that Taubman Centers uses to conduct its retail shopping center business.

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The companies said the Taubman family will sell about one-third of its ownership interest in TRG, and remain a 20% partner.

Robert Taubman is chairman, president, and CEO of Taubman Centers .

Simon plans to acquire all of Taubman’s stock for $52.50 per share in cash, or a 51% premium over the stock’s closing price on Friday. The transaction is expected to immediately boost Simon’s funds from operations and to be at least 3% accretive on an annualized basis after closing.

Taubman owns, manages, or leases 26 shopping centers in the United States and Asia, including the Beverly Center in Los Angeles and The Mall at Short Hills in New Jersey. Simon owns or has a stake in over 200 properties in the United States.

Malls are struggling with retail bankruptcies and store closings as Americans shift their shopping habits. To avoid empty areas inside the properties, shopping centers are adding more non-retail and entertainment options.

“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,” said chief executive officer and president David Simon in a press release.

Taubman will continue to be managed by chairman, president, and CEO Robert Taubman, in partnership with Simon.

“The Taubman Board of Directors has always been focused on maximizing shareholder value,” said Myron Ullman, lead director of the Taubman Board of Directors and chairman of the special committee of the Taubman Board of Directors. “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.”

The deal is expected to close by the middle of 2020. It still needs approval from two-thirds of the outstanding Taubman voting stock and a majority of outstanding Taubman voting stock not held by the Taubman family.