Simon Property Group Inc. has terminated its planned acquisition of Taubman Centers Inc.
The transaction, which was announced in February, would have involved Simon buying an 80% stake in Taubman Centers in a deal valued at $3.6 billion.
Taubman’s properties include the Stamford Town Center mall while Simon’s regional presence includes The Westchester in White Plains, The Shops at Nanuet and Woodbury Common Premium Outlets in Central Valley.
In a press statement, Simon said the termination was based on two grounds: the COVID-19 pandemic having a “uniquely material and disproportionate effect on Taubman compared with other participants in the retail real estate industry” and Taubman’s alleged breach of obligations relating to its business during the pandemic, including “not making essential cuts in operating expenses and capital expenditures.”
Simon also filed an action in the Circuit Court for the 6th Judicial Circuit of Oakland County, Michigan, against Taubman Centers and The Taubman Realty Group Limited Partnership requesting a declaration that Taubman has suffered a material adverse event under the merger agreement and breached the covenants in agreement related to how it operated its business.
Taubman reacted to the announcement with a statement declaring “Simon’s purported termination of the merger agreement is invalid and without merit, and that Simon continues to be bound to the transaction in all respects.”
The company added it intended to hold Simon to its obligations in the merger agreement and to “vigorously contest Simon’s purported termination and legal claims.”