Simon Urges Taubman Stockholders to Demand Meeting

CHICAGO-Simon Property Group, Inc. is asking the Securities and Exchange Commission to allow Taubman Centers, Inc. shareholders to hold a special meeting to consider its $18-per-share offer. Officials of the larger, Indianapolis-based retail REIT believe the special meeting to consider the $1.12-billion offer can happen if 25% of Bloomfield Hills, MI-based Taubman Centers turn in proxies.

Simon Property Group announced its proxy effort after the close of business Monday, when Taubman Centers stock closed at $16.38 per share.

In addition to meeting to consider their offer, Simon Property Group officials are seeking to change Taubman Centers’ charter. An “excess share provision” prevents anyone from buying a block of shares larger than 8.23% of Taubman Centers stock.

Meanwhile, three lawsuits have been filed in recent weeks seeking to force Taubman Centers’ board of directors to consider Simon Property Group’s offer. Attorneys for Taubman Centers have gone into court seeking to dismiss those lawsuits.

Among the issues is whether the Taubman family has enough voting power to block a sale. Simon Property Group claims the family owned a 1% stake of the common stock before quadrupling it after the tender offer. Taubman Centers counters by saying the Taubman stake is more than 30%, enough to block a sale, when preferred stock holdings are considered.

Taubman Centers officials have labeled Simon Property Group’s offer “inadequate, opportunistic and clearly not in the best interests of the Taubman Centers shareholders.”

“Over the past several months, the board of directors of the company unilaterally has taken actions to disenfranchise the company’s common shareholders and frustrate their ability to receive $18 per share in cash in the offer,” according to the filing. “SPG believes that the company’s common shareholders, and not the Taubman family, should have the opportunity to decide the future of the company and to receive $18 per share in cash for their shares in the offer.”

The application for the preliminary proxy statement cost Simon Property Group $223,861, according to the SEC filing.