Owner of malls ups bid for rival

Simon Property Group is making its third attempt to take over Taubman Centers.

©Associated Press
January 16, 2003

DETROIT -- Simon Property Group has sweetened its bid to $1.74-billion for rival shopping mall owner Taubman Centers Inc., which has already rejected two earlier offers.

Simon Property said Wednesday that it was offering $20 a share for all of Taubman's shares, up from its most recent offer of $18 a share, and set a Feb. 14 deadline for Taubman shareholders to accept.

In addition, Simon said it is being joined in its latest effort by Westfield America Inc., a subsidiary of the Australian company Westfield America Trust.

"We believe the public shareholders -- who own 99 percent of (Taubman) -- should have the right to decide for themselves if they want $20 in cash for their shares," David Simon, chief executive of Simon Property, said in a statement.

Taubman's board already has rejected two unsolicited takeover bids by Simon -- one valued the company at $17.50 in cash and the other at $18 a share.

Taubman said its board will meet before responding to Simon's latest announcement. The company asked stockholders to hold off on selling their stock until the board has issued its recommendation.

Simon and Westfield said they will withdraw the offer unless at least two-thirds of Taubman's common shares are tendered by Feb. 14.

In the letter to Taubman shareholders, Simon urges them to sell and send a message to the Taubman board.

"Despite the compelling premium being offered, your board has thus far refused to even discuss a transaction because the Taubman family -- which owns approximately 1 percent of TCO's common shares -- opposes a sale," the letter reads.

Taubman family members control more than a 30 percent voting stake, however.

In trading on the New York Stock Exchange, Taubman shares rose $1.50, or 9.4 percent, to close Wednesday at $17.44 while Simon shares fell 13 cents to $33.11.

Simon Property is the largest North American shopping center owner in the amount of leased space, according to a ranking by the International Council of Shopping Centers.

Simon owns or has an interest in 249 properties, including The Fashion Center at Pentagon City in Washington and Minnesota's Mall of America.

Taubman Centers owns or manages 30 shopping centers in 13 states, including Twelve Oaks Mall in Novi, Woodfield in Schaumburg, Ill., and the Beverly Center in Los Angeles.

Westfield America was part of the group that signed a 99-year lease for the World Trade Center complex before Sept. 11, 2001.

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