Simon set to control Taubman this time
Simon Property Group Inc is set to buy 80% of The Taubman Realty Group LP for $US3.6 billion, 17 years after the Taubman family fought off a joint takeover by Simon & Australian mall owner Westfield’s American offshoot.
This time round, the Taubman family will retain 20% ownership.
Simon & Taubman Centres Inc announced the proposed $US52.50 cash/share deal on Monday.
Taubman has 26 super-regional shopping centres in the US & Asia and its existing executive team, led by chair Bobby Taubman, will continue to manage the portfolio in partnership with Simon.
Simon has 209 US properties plus an international portfolio, 5 developments underway this year in the US, Spain, Engand, France & Thailand, and 15 redevelopments.
A special committee of independent Taubman directors recommended the transaction and both companies’ boards approved it. Simon expects to fund the total required cash consideration with existing liquidity.
Simon chair, chief executive & president David Simon said the transaction would be immediately accretive to Simon’s funds from operations.
Mr Taubman commented: “Over the last few years, David [Simon] & I have developed an excellent personal relationship and, importantly, Simon shares our commitment to serving retailers, shoppers & the communities in which we operate. The board & I are confident that Simon is the ideal partner to help us build on our progress.”
The purchase price represents an underwritten capitalisation rate of about 6.2%.
The $52.50/share price represents a 51% premium to Taubman’s closing price last Friday and a 19% premium to total enterprise value, which includes debt & preferred equity.
The deal requires approvals from two-thirds of the outstanding Taubman voting stock and a majority of the outstanding Taubman voting stock not held by the Taubman family. The Taubman family, which represents about 29% of outstanding Taubman voting stock, has agreed to vote in favour of the transaction, which is expected to close in mid-2020.
2003 (though date stamp shows 2 March 2004): Taubman defeats Simon/Westfield takeover bid
Attribution: Simon, Taubman.