Simon Property Group Inc. and Taubman Centers Inc. have entered into a definitive agreement under which Simon will acquire an 80% ownership interest in The Taubman Realty Group Limited Partnership (TRG), the companies announced.
In Puerto Rico, Simon Property Group owns the Puerto Rico Premium Outlets in Barceloneta and the Plaza Carolina shopping center. Meanwhile, Taubman owns The Mall of San Juan property.
Simon, through its operating partnership, Simon Property Group, L.P., will acquire all of Taubman common stock for $52.50 per share in cash and the Taubman family will sell approximately one-third of its ownership interest at the transaction price and remain a 20% partner in TRG, according to a press release.
TRG owns, manages and/or leases 26 super-regional shopping centers in the U.S. and Asia, including 24 high-quality retail assets (21 in the United States and 3 in Asia), consisting of some 25 million feet of leasable area, and will continue to be managed by its existing executive team, under the leadership of Taubman President Robert S. Taubman, in partnership with Simon.
“The parties have agreed to work together to implement best practices to achieve operational efficiencies and will eliminate Taubman’s public company costs immediately following closing,” they said in a press release.
“Since Taubman Centers’ founding 70 years ago, we have built a portfolio of high-quality assets and continuously adapted to the evolving retail landscape. I am proud of all that this company’s talented employees have achieved and am thrilled to have the opportunity to join together with Simon through this joint venture,” Taubman said.
In Puerto Rico, both companies have made significant investments in their retail properties, especially since Hurricane María’s strike in September 2017, which in its wake left major damage on all of their properties. The Mall of San Juan remained closed for about a month, while it took several months for the Barceloneta property to come back online, according to published reports.
Taubman Centers made its entrance into the local market in 2015, with the opening of The Mall of San Juan, a high-end shopping center that introduced a number of retailers to the market.
The transaction has been unanimously recommended by a Special Committee of independent directors of Taubman and approved unanimously by the Boards of Directors of both companies.
Simon expects to fund the deal with approximately $3.6 billion with existing liquidity.
The transaction is expected to close in mid-2020.