Mall giants Simon and Taubman — owner of Tampa's International Plaza — are headed to court over their $3.6B merger deal
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Jun 26, 2020

Mall giants Simon Property Group and Taubman Centers are headed to court over their $3.6 billion merger deal.

Simon struck a deal to buy Taubman's 26 U.S. luxury malls in early February, but in early June said it was terminating its agreement with Taubman, citing the novel coronavirus pandemic and alleging that Taubman has breached the parts of the merger agreement that govern its business operations.

Michigan-based Taubman (NYSE: TCO) owns Tampa's International Plaza. After Simon announced its plans to pull out of the deal, Taubman said in a statement that Simon's move "is invalid and without merit, and that Simon continues to be bound to the transaction in all respects."

A circuit court judge in Michigan this week ordered that discovery is to commence immediately and referred the case to mediation, to be completed by July 31. If Simon and Taubman can't reach a deal in mediation, the case has to be trial ready by mid-November, the judge ordered.

On Thursday, Taubman announced that its shareholders approved the merger.

"Given Simon’s purported termination of the Merger Agreement and the pending litigation, it appears that Simon will not consummate the Transactions on June 30, 2020, despite Simon’s contractual obligation to do so," Taubman said in a news release.

Seven of Taubman's properties are in Florida, where retail centers are heavily dependent on tourism. The state's tourism and hospitality industries have been devastated by the pandemic, which shuttered theme parks and has left consumers leery of airplanes and large crowds.

Simon (NYSE: SPG) is already exposed to the downturn in Florida tourism. It has 22 properties in the Sunshine State, many of which are outlet malls strategically positioned in tourist corridors near beaches and theme parks. In Tampa Bay, its portfolio includes Tyrone Square Mall, Ellenton Outlets and Tampa Premium Outlets.

Besides International Plaza, Taubman's other Florida properties include: