Taubman Board Says 'No' to Simon Offer

The board of directors of Taubman Centers Inc. (Bloomfield Hills, Mich.) has unanimously voted to reject the offer by Simon Property Group (Indianapolis) of $18 per share cash “as inadequate, opportunistic and clearly not in the best interests of the Taubman Centers shareholders.

“Accordingly,” said the statement, “the board strongly recommends that all Taubman Centers shareholders reject Simon's offer and not tender their shares.”

Chairman, president and ceo Robert Taubman said, “The Taubman Centers board has thoroughly considered Simon's tender offer — as it had considered the original proposal before it was made public — and again has unanimously rejected the offer. The board believes that the offer . . . does not reflect the underlying value of the company's assets or its growth prospects.

“Our collection of upscale regional mall assets cannot be replicated,” Taubman declared. “They represent the most productive portfolio of regional malls in the public sector and have always been and will always be highly coveted. . . . Simon's hostile offer is not a logical catalyst for a sale. The board's position remains clear — the company is not for sale.”

Simon Property, which has also taken Taubman Centers to court to contest how the Taubman family obtained its voting control, responded by saying that it still planned to proceed with its tender offer and the litigation.

Some analysts are suggesting that Taubman might just be posturing as part of way to negotiate a higher sale price. “The wording of Taubman's response suggests to us that the Taubman board and family would consider a higher offer,” said one.

The success of Simon's bid may now rest with a judge who must determine whether Taubman Centers broke Michigan law by giving the Taubman family more than 30 percent voting control without a shareholder vote.

Taubman Centers owns about two dozen mostly “super-regional” shopping centers (including the Mall at Short Hills, N.J.) It was founded by former Sotheby's chairman A. Alfred Taubman, now in jail for fraud. Simon Property manages more than 250 shopping malls and community shopping centers properties totaling about 185 million square feet, including The Mall of America (Minneapolis), The Forum Shops at Caesars (Las Vegas) and The Fashion Center at Pentagon City (Washington, D.C.).