This Mall Megabuyout Deal Is Back on Track -- at a Lower Price
For the past five months, Simon Property Group (NYSE: SPG) and Taubman Centers (NYSE: TCO) have been embroiled in litigation, after Simon attempted to terminate its planned takeover of Taubman in June. The COVID-19 pandemic has crushed U.S. malls in 2020, giving Simon a strong incentive to try to back out. The top U.S. mall owner believed it had found loopholes in the merger contract enabling it to do just that.
The legal battle was set to be decided in a trial this month. Unsurprisingly, though, neither side was eager to risk losing in court. On Sunday, the two companies announced a settlement in which Simon will go ahead with its purchase of a controlling stake in Taubman, but at a lower price.
Back in February, Simon agreed to buy an 80% stake in Taubman -- including all of its publicly traded stock -- for $52.50 per share. That gave Taubman an equity valuation of a little more than $4.5 billion (or $3.6 billion for Simon's 80% stake). Including its $5.3 billion of debt and preferred stock, the deal valued Taubman at nearly $10 billion.
Source Fool.com
