INDIANAPOLIS, June 10, 2020 /PRNewswire/ -- Simon Property
Group, Inc. (NYSE: SPG) ("Simon") today announced that it has
exercised its contractual rights to terminate its February 9, 2020 merger agreement (the "Merger
Agreement") with Taubman Centers,
Inc. (NYSE: TCO). Simon also filed an action today in the Circuit
Court for the 6th Judicial Circuit of Oakland County, Michigan against Taubman Centers, Inc. and The Taubman Realty
Group Limited Partnership (collectively, "Taubman") requesting a
declaration that Taubman has suffered a Material Adverse Event
("MAE") under the Merger Agreement and has breached the covenants
in the Merger Agreement governing the operation of Taubman's
business.
As detailed in the complaint filed this morning, Simon's
termination of the Merger Agreement is based on two separate and
independent grounds. First, the COVID-19 pandemic has had a
uniquely material and disproportionate effect on Taubman compared
with other participants in the retail real estate industry.
Second, in the wake of the pandemic, Taubman has breached its
obligations, which are conditions to closing, relating to the
operation of its business. In particular, Taubman has failed
to take steps to mitigate the impact of the pandemic as others in
the industry have, including by not making essential cuts in
operating expenses and capital expenditures.
The Merger Agreement specifically gave Simon the right to
terminate the transaction in the event that a pandemic
disproportionately hurt Taubman. Taubman's significant proportion
of enclosed retail properties located in densely populated major
metropolitan areas, dependence on both domestic and international
tourism at many of its properties, and its focus on high-end
shopping have combined to impact Taubman's business
disproportionately due to the COVID-19 pandemic when compared
to the rest of the retail real estate industry. In addition,
Taubman has breached its obligation to operate its business in the
ordinary course.
About Simon
Simon is a real estate investment trust
engaged in the ownership of premier shopping, dining, entertainment
and mixed-use destinations and an S&P 100 company (Simon
Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for
millions of people every day and generate billions in annual
sales.
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SOURCE Simon