(Bloomberg) — Simon Property Group Inc. has reached a deal to buy rival mall owner Taubman Centers Inc. at a lower price than the companies agreed to in February.
The companies agreed to a modified deal that would see Simon Property pay $43 in cash for each Taubman Centers share, down from the original offer of $52.20 a share for Taubman made just before the coronavirus started sweeping across the U.S.
Under the terms of the revised deal, Taubman won’t declare or pay a dividend on its common stock prior to March 1, 2021, and then, only subject to certain limitations and conditions. The companies have also settled their pending litigation, according to a joint statement Sunday.
In June, Simon walked away from its initial $3.6 billion offer for Taubman and sought in court to have the transaction terminated. Many analysts speculated the move was a negotiating tactic to get a better price for the deal.
Simon, based in Indianapolis, argued it had legitimate grounds to scrap the buyout because Taubman’s revenue suffered a “material adverse effect” and the company didn’t take proper steps to mitigate damage from the pandemic.
Bloomfield Hills, Michigan-based Taubman countersued, saying its rival was legally obligated to complete the transaction and that it had taken some of the same steps as Simon to address the fallout from Covid-19.
The deal is now expected to close in late 2020 or early 2021.
Taubman shares have fallen 6% since March, while Simon shares are down 36%.
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