Mall merger dispute could leave both sides losers

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Simon Property is backing out of its purchase of rival Taubman, saying the seller mishandled Covid-19. The U-turn isn’t a vote of confidence in its dealmaking or business model, writes TheRealLSL.

Simon Property said on June 10 it is terminating its merger agreement to buy rival mall operator Taubman Centers. The two companies agreed on Feb. 9 to merge. Simon was to pay Taubman shareholders $52.50 per share in cash, equivalent to $3.6 billion.

Simon cited Covid-19, which it claims has had “a uniquely material and disproportionate effect” on Taubman properties. Simon also said that Taubman breached its obligations by not cutting operating expenses and capital expenditures in response to the pandemic.

 

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