Shareholders of Michigan-based Taubman Centers Inc. (NYSE: TCO) have approved the company’s $3.6 billion acquisition by Simon Property Group Inc. (NYSE: SPG) in Indianapolis. However, the deal remains in litigation after Simon announced earlier this month it planned to terminate the merger agreement.
Taubman says the shareholder approval satisfies the final condition needed to close the deal, which was slated to occur at the end of the month. The company, however, says that closing date is now unlikely.
On June 10, Simon said it was pulling out of the deal due to the COVID-19 pandemic’s impact on Taubman, along with what it called the mall group’s breach of the merger agreement. Simon claims Taubman failed to mitigate the effects of the pandemic “by not making essential cuts in operating expenses and capital expenditures.”
“Taubman continues to believe that Simon’s purported termination of the Merger Agreement is invalid and without merit, and that Simon continues to be bound to the Merger Agreement and to consummate the Transactions,” Taubman said in a news release. “Taubman filed an answer and counterclaim in the lawsuit, rejecting Simon’s allegations and seeking specific performance of Simon’s obligations under the Merger Agreement, including Simon’s obligation to consummate the Transactions, as well as other relief.”
In a filing this week in the Circuit Court for the Sixth Judicial Circuit in Michigan, Judge James Alexander ordered the case between the two companies go into mediation, which is expected to be completed by July 31.