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Simon Property Terminates Deal To Buy Taubman Centers

Simon Property Group Inc. (SPG) said Wednesday that it has exercised its contractual rights to terminate its deal to buy Taubman Centers Inc. (TCO).

In Wednesday regular trading, TCO is currently trading at $33.89, down $11.36 or 25.10 percent.

SPG is trading at $80.65, down $5.82 or 6.73 percent.

Simon Property said that the deal gave the company the right to terminate the transaction in the event that a pandemic disproportionately hurt Taubman.

Simon noted that Taubman's significant proportion of enclosed retail properties located in densely populated major metropolitan areas, dependence on both domestic and international tourism at many of its properties, and its focus on high-end shopping have combined to impact Taubman's business disproportionately due to the COVID-19 pandemic when compared to the rest of the retail real estate industry.

In addition, Simon alleged that Taubman has breached its obligation to operate its business in the ordinary course.

Taubman has failed to take steps to mitigate the impact of the pandemic as others in the industry have, including by not making essential cuts in operating expenses and capital expenditures, Simon said.

Simon also filed an action in the Circuit Court for the 6th Judicial Circuit of Oakland County, Michigan against Taubman Centers requesting a declaration that Taubman has suffered a Material Adverse Event and has breached the covenants in the Merger Agreement governing the operation of Taubman's business.

In February 2020, Simon Property agreed to acquire all of Taubman common stock for $52.50 per share in cash.

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