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BLOOMFIELD HILLS, MI-The last word on the battle for ownership of Taubman Centers, Inc., likely has not yet been spoken.

A key executive at Westfield America, which partnered with Simon Properties Inc. in a $1.7 billion hostile takeover bid for Taubman, says though the partners have withdrawn their $20-a-share tender offer, they may still fight a proxy battle to assume control of the company.

Also, Standard & Poor’s said Tuesday the outlook for Taubman remains “negative.”

News reports quoted Peter Lowy, son of Westfield founder Frank Lowy and managing director of the Australian company’s US operations, also saying the battle may not be over yet.

“We have withdrawn our tender offer,” Lowy said Tuesday in New York. “But we could run a proxy battle if we so choose.”

After Westfield USA and Indianapolis-based Simon began their proxy battle in November 2002, the partners nominated a four-person slate for election to the Taubman board of directors. Westfield and Simon have not withdrawn their candidates. There are currently eight members on the Taubman board.

Earlier this month, Michigan Gov. Jennifer Granholm signed legislation that was pushed through the Michigan Legislature to change the state’s corporate governance laws in a move that stymied Simon’s bid for Taubman Centers. The new law strengthens the rights of preferred share stockholders. The next day, Oct. 8, Simon and Westfield withdrew their tender offer.

Lowy’s comment Tuesday was the first either side had made since then hinting that the take-over battle was not yet over.

Meanwhile Tuesday, S&P removed Taubman from its CreditWatch list as a result of the conclusion of the unsolicited bid, but S&P credit analyst Scott Robinson said Taubman Centers still faces issues.

In the report, Robinson wrote of Taubman: “The company has been conservatively expensing all costs related to the takeover battle, which has, and could continue to, impact earnings in the near-term. In addition, given the smaller size of the company, the likely resumption of share repurchases in combination with a recent asset sale could also pressure and make more volatile currently weak fixed-charge coverage measures. The company also continues to grapple with a handful of underperforming developments. Ratings would be lowered a notch if it appears unlikely that debt protection measures will return to pre-takeover attempt levels.”

Taubman, which trades on the New York Stock Exchange as TCO, closed unchanged Tuesday at $20.50 a share. It had been below $19.50 in the middle of September and was at $14.80 the day before the Simon/Westfield tender offer was made in November 2002.

Bloomfield Hills-based Taubman has just more than $2 billion in assets on a book value basis, according to S&P, and owns interests in 20 regional malls, encompassing nearly 23 million sf in nine states.

Simon is the nation’s largest owner of shopping malls in the US.

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