However, the Taubman family and supporters own enough shares to block thetakeover.Joele Frank, a Taubman spokeswoman, said the buy back is only to bolster thecompany.

"The Company expects the repurchase program, when completed, to addapproximately 7 cents per share in earnings power (FFO) in the first fullyear after completion," Frank told GlobeSt.com. "The board of TaubmanCenters cannot run the company on Simon Property Group's timetable. TheBoard firmly believes that the share buyback is the right thing to do."

Also, Myron E. (Mike) Ullman III has joined the Taubman's Board ofDirectors, replacing jailed founder A. Alfred Taubman.Ullman will serve as an independent member of the company's board to fillthe existing vacancy in the class of directors whose term will expire in2005.

Simon's officers have cried foul over the recent Taubman moves.Simon contends that the TCO Board is breaching its fiduciary duties to TCOshareholders by improperly using the TCO share repurchase program toincrease the relativevoting power of the Taubman family going into a contested election for boardmembers.

Simon believes that implementation of the TCO repurchase program isan improper use of shareholder funds designed to further entrench theTaubman family, and that it contradicts TCO's public pledge of February 10,2003, not to use the repurchase program to increase the relative votingpower of the family on matters affecting the tender offer by SPG andWestfield.SPG and Westfield also said they believe that the TCO Board has breached itsfiduciary duties to TCO shareholders by invalidly appointing its ownhandpicked director, Ullman, in an attempt to deprive TCO shareholders oftheir right to fill the seat left vacant by A. Alfred Taubman.

In addition, Simon asserts that the appointment of Mr. Ullman is invalid underTCO's charter, by-laws, and Michigan law, which require that the seat towhich Mr. Ullman was appointed be filled through a shareholder vote.Frank said Taubman is following its own policies.

"Under Michigan law and the Taubman Centers bylaws, the company's Board ofDirectors fills vacancies," Frank told GlobeSt.com. "Ullman is anindependent director with impeccable credentials."

Instant Insights /

GlobeSt.com UPDATE: Taubman Buying Back Stock; Simon Cries Foul

Related Stories

Recommended For You