TCO - Simon Property Terminates Its Merger With Taubman Centers. What Happens Now?
Periods of financial stress almost inevitably put pressure on mergers in progress. Deals that looked good under normal circumstances often look downright awful when credit markets tighten and asset prices fall.
To avoid buyer's remorse, the purchaser will often try and find a way out of the deal. This situation is playing out now with a collapsed merger between two mall real estate investment trusts (REITs).
On Feb. 9, 2020, Simon Property Group (NYSE: SPG) and Taubman Centers (NYSE: TCO) announced a merger in which Simon would purchase 80% of the common shares of Taubman for $52.50 per share in cash, or a 51% premium to Taubman's closing price on Feb. 7. Total consideration for the transaction was $3.6 billion, and the Taubman family would retain a 20% minority interest.