Indianapolis — Simon Property Group (NYSE: SPG) has agreed to acquire an 80 percent interest in Taubman Centers Inc. (NYSE: TCO), a Michigan-based retail owner-operator, for approximately $3.6 billion.
Under the terms of the agreement, Simon is buying all of Taubman’s common stock at a price of $52.20 per share in an all-cash deal. The transaction is expected to close in mid-2020.
The purchase price represents a 51 percent premium over Taubman’s closing price of $34.67 per share Friday, Feb. 7. Taubman’s existing debt, which Simon will assume, was factored into the price, which represents a capitalization rate of 6.2 percent. Taubman will continue to operate as a separate entity.
Taubman’s portfolio spans 26 super-regional malls and power centers totaling more than 25 million square feet of gross leasable space in the United States and Asia.
“By joining together, we will enhance the ability of Taubman to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers and substantial new job prospects for local communities,” says David Simon, CEO of Simon Property Group.
Simon Property Group’s stock price opened at $142.11 per share Monday, Feb. 10, down from $185.30 per share at this time last year. Taubman’s stock price opened at $53.15 per share Monday, Feb. 10, up from $49.17 per share a year ago.
— Taylor Williams