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BLOOMFIELD HILLS, MI-Both sides have declared victory in a recent ruling in a REIT takeover casein the U.S. District Court for the Eastern District of Michigan.

Simon Property Group of Indianapolis has offered $20 per share for TaubmanCenters Inc. shares, in an effort to get a two-thirds majority of the Taubman voting shareholdervote, allowing the purchase of the Michigan-based real estate investmenttrust, and has sued in court to knock some control from the top Taubmanfamily and friends who own more than one-third of the stock.

Already, 85% of the common stock shareholders have approved thetakeover. The judge ordered that the 33.6% Series B shares owned by the Taubmanfamily and friends may not be voted until approved by a majority ofdisinterested public shareholders in compliance with the Michigan ControlShare Act. Simon has declared victory in the case.

However, Taubman said in a statement that the court is ruling for its side.”Although Simon claims that the Court enjoined the Taubman family fromvoting all of its shares, this is simply false,” according to the statement.”The Court has entered an order enjoining only the voting of ‘those sharesrepresented in the voting agreements previously entered with Robert Taubman,roughly three percent. The Court specifically stated that, ‘The Taubmansare, likewise, entitled to vote any shares that they held prior to RobertTaubman’s voting agreement contracts or that they have since acquired,’roughly 30.6 percent.”

Analysts from Banc of America Securities think Simon won, but that Taubmanwill appeal.Analyst Lee Schalop said that though a footnote about the prior votingagreement is misleading, the Taubmans will not be able to vote their share.

Also, Simon can hold a special meeting to vote to eliminate the “excessshare provision” in the Taubman charter that prevents a buyer from acquiringmore than 8.2% of the common stock.The two companies will likely have to go back to the court forclarification, said Schalop, and Taubman will appeal if the decision doesnot go their way. This case will likely drag on through 2003, said Schalop.

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