Taubman Reopens All Centers as It Fights to Retain Deal With Mall Giant Simon
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As it fights to retain a merger agreement with America’s biggest mall owner, all of Taubman Centers Inc.’s properties have reopened to the public.
The Bloomfield Hills, Mich.-based real estate investment trust has opened back up its entire fleet of shopping centers in the United States and Asia after the coronavirus pandemic forced its locations to temporarily shut down starting mid-March.
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According to the company, its malls in Asia have seen a “quick rebound,” while its U.S.-based units are recording “very positive progress.”
“We are pleased to safely welcome customers back, and we are encouraged by the results we are seeing,” chairman, president and CEO Robert Taubman added in a statement.
The announcement comes as Taubman continues to battle with Simon Property Group Inc. over the latter’s intention to pull out of an all-cash merger deal arranged in February. At the time, Simon said it would snap up 80% of Taubman Realty Group Limited Partnership for $3.6 billion. The company was set to purchase Taubman’s stock for $52.50 a share, with the Taubman family retaining a 20% ownership in TRG. (Taubman owns, manages or leases 26 shopping centers in the U.S. and Asia, while Simon Property has more than 200 malls and outlets in the U.S.)
However, in mid-June, Simon said it planned to terminate the agreement, citing the “uniquely material and disproportionate effect” of the COVID-19 outbreak on Taubman versus others in the retail real estate industry. According to Simon, Taubman was “disproportionately hurt” by the pandemic due to its “significant” number of enclosed properties located in densely populated cities, focus on high-end shopping and “dependence” on domestic and international tourism.
Days later in a court filing in Michigan circuit court, Taubman called Simon’s decision a “classic case of buyer’s remorse.” It claimed that Simon “repeatedly failed to assert the purportedly incurable, disproportionate material adverse effect of the pandemic on Taubman.” Further, it argued that both parties were “well aware” of the risks of the current health crisis when they reached a deal in February.
The two retail real estate firms have been ordered by a judge to enter mediation in July. If they fail to come to terms, court proceedings will begin in November.
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