Simon Says 'Sell' — Taubman Says 'No'

The Simon Property Group (Indianapolis), the nation's largest owner of shopping malls, made a $1.48 billion unsolicited bid yesterday for Taubman Centers (Bloomfield Hills, Mich.). And as for now, at least, the owner of 20 mostly “super-regional” shopping centers has rejected the offer.

Taubman Centers, founded by former Sotheby's chairman A. Alfred Taubman, owns the Mall at Short Hills (N.J.) among about two dozen properties. The board and the Taubman family said they had rejected the offer and that “any efforts to purchase Taubman Centers would not be productive.”

Without support for the bid from the Taubman family, Simon Property's takeover bid faces challenging hurdles. The family controls 36 percent of the company's voting power through a special series of shares. Taubman, who is serving a prison sentence for conspiring to fix prices when he ran Sotheby's, no longer has a board seat; its chairman is his son, Robert S. Taubman.

Simon Property has indicated that it feels the Taubman family gained voting control through a “surreptitious” restructuring, and if it has the support of other Taubman Centers'shareholders, it could go to court to challenge the Taubman family's control. Simon Property could also wage a proxy contest to put its own people on Taubman Centers'board, though that could take at least two years since only three of the eight board members come up for re-election each year.

Simon Property manages more than 250 shopping malls and community shopping centers properties totaling about 185 million square feet, including The Mall of America (Minneapolis), The Forum Shops at Caesars (Las Vegas) and The Fashion Center at Pentagon City (Washington, D.C.).