Simon Property Group will acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership (TRG) in a deal valued at about $3.6 billion, said Simon Property Group and Taubman Centers in a statement on Monday.
Simon, a real estate investment trust engaged in the ownership of shopping, dining, entertainment and mixed-use destinations and an S&P 100 company, through its operating partnership, Simon Property Group, L.P., will acquire all of Taubman common stock for $52.50 per share in cash and the Taubman family will sell approximately one-third of its ownership interest at the transaction price and remain a 20% partner in TRG.
”Simon expects to fund the total required cash consideration of approximately $3.6 billion with existing liquidity,” said in a statement. ”The purchase price represents an underwritten capitalization rate of approximately 6.2%.”
TRG, an S&P MidCap 400 Real Estate Investment Trust, is engaged in the ownership, management and/or leasing of 26 super-regional shopping centers in the U.S. and Asia. TRG’s ownership includes 24 high-quality retail assets (including 21 in the United States and 3 in Asia), consisting of approximately 25 million feet of gross leasable area.
TRG will continue to be managed by its existing executive team, under the leadership of Taubman Chairman, President and Chief Executive Officer Robert S. Taubman, in partnership with Simon.
“We are very pleased to announce this transaction, which will be immediately accretive to Simon’s FFO. By joining together, we will enhance the ability of TRG to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers, and substantial new job prospects for local communities. I look forward to partnering with Bobby and the TRG executive team in this exciting new joint venture,” said David Simon, Simon Chairman of the Board, Chief Executive Officer and President.
”With this transaction, we will deliver a significant, immediate cash premium to shareholders...”
“The Taubman Board of Directors has always been focused on maximizing shareholder value. With this transaction, we will deliver a significant, immediate cash premium to shareholders. The Special Committee of the Board unanimously believes that this transaction with Simon is a great outcome for all of our stakeholders,” said Myron E. Ullman, Lead Director of the Taubman Board of Directors and Chairman of the Special Committee of the Taubman Board of Directors.
“Over the last few years, David and I have developed an excellent personal relationship and importantly, Simon shares our commitment to serving retailers, shoppers and the communities in which we operate. The Board and I are confident that Simon is the ideal partner to help us build on our progress,” added Robert S. Taubman, Chairman, President and Chief Executive Officer of Taubman.