Taubman Centers Stock Crashes 20% as Simon Cancels Buyout Deal
Shares of Taubman Centers (NYSE: TCO) doubled in February, after top mall REIT Simon Property Group (NYSE: SPG) agreed to buy all of Taubman's publicly traded stock at a big premium. Taubman shares traded for around $26 at the end of January, but Simon offered to pay $52.50 per share for an 80% stake in the upscale mall owner. (The founding Taubman family would retain the other 20%.)
Unfortunately, the COVID-19 pandemic upended the retail industry soon thereafter. Top-tier malls have been particularly hard hit, as successful malls typically attract big crowds, making social distancing impractical.
As a result, Simon Property Group now wants to back out of its deal to buy Taubman. On Wednesday, the REIT announced that it was terminating the agreement and requesting a court declaration that Taubman had suffered a material adverse event that would permit such a termination. As a result, Taubman stock plunged as much as 41% on Wednesday -- bottoming out at $26.70 -- before recovering to end the day down 20% at $36.17.
Source Fool.com
