WASHINGTON (dpa-AFX) - Simon Property Group, Inc. (SPG) and Taubman Centers, Inc. (TCO) announced Monday that they have entered into a definitive agreement under which Simon will acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership.
Simon, through its operating partnership, Simon Property Group, L.P., will acquire all of Taubman common stock for $52.50 per share in cash and the Taubman family will sell approximately one-third of its ownership interest at the transaction price and remain a 20% partner in Taubman Realty.
The transaction price of $52.50 per share in cash represents a 51% premium to TCO's closing price on February 7, 2020 and a 19% premium to total enterprise value, which includes debt and preferred equity.
The transaction is expected to be at least 3% accretive to Simon's Funds From Operations (FFO) per share on an annualized basis, beginning immediately upon consummation of the transaction.
Taubman Realty is engaged in the ownership, management and/or leasing of 26 super-regional shopping centers in the U.S. and Asia. They will continue to be managed by its existing executive team, under the leadership of Taubman Chairman, President and CEO Robert Taubman, in partnership with Simon.
The transaction has been unanimously recommended by a Special Committee of independent directors of Taubman and approved unanimously by the Boards of Directors of both companies. Simon expects to fund the total required cash consideration of approximately $3.6 billion with existing liquidity.
The transaction, expected to close in mid-2020, is subject to customary closing conditions including approval of two-thirds of the outstanding Taubman voting stock and approval from majority of the outstanding Taubman voting stock not held by the Taubman family.
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