Item 1.01. Entry into a Material Definitive Agreement
Amended and Restated Merger Agreement
On November 14, 2020, Simon Property Group, Inc., a Delaware corporation
("Simon"), Simon Property Group, L.P., a Delaware limited partnership (the
"Simon Operating Partnership"), Silver Merger Sub 1, LLC, a Delaware limited
liability company and wholly owned subsidiary of the Simon Operating Partnership
("Merger Sub 1"), Silver Merger Sub 2, LLC, a Delaware limited liability company
and wholly owned subsidiary of Merger Sub 1 ("Merger Sub 2" and, together with
Simon, the Simon Operating Partnership and Merger Sub 1, the "Simon Parties"),
Taubman Centers, Inc., a Michigan corporation ("TCO"), and The Taubman Realty
Group Limited Partnership, a Delaware limited partnership (the "Taubman
Operating Partnership" and, together with TCO, the "Taubman Parties"), entered
into an Amended and Restated Agreement and Plan of Merger (the "Amended Merger
Agreement"). The Amended Merger Agreement amends and restates the Agreement and
Plan of Merger, dated as of February 9, 2020, by and among the Simon Parties and
the Taubman Parties (the "Original Merger Agreement"), in its entirety, on the
terms and subject to the conditions set forth therein. Pursuant to the Amended
Merger Agreement, subject to the satisfaction or waiver of certain conditions,
Merger Sub 2 will be merged with and into the Taubman Operating Partnership (the
"Partnership Merger") and TCO will be merged with and into Merger Sub 1 (the
"REIT Merger" and, together with the Partnership Merger, the "Mergers"). Upon
completion of the Partnership Merger, the Taubman Operating Partnership will
survive (the "Surviving Taubman Operating Partnership") and the separate
existence of Merger Sub 2 will cease. Upon completion of the REIT Merger, Merger
Sub 1 will survive ("Surviving TCO") and the separate corporate existence of TCO
will cease. Immediately following the Partnership Merger, the Surviving Taubman
Operating Partnership will be converted (the "Conversion") into a Delaware
limited liability company (the "Joint Venture").
Transaction Structure
At the effective time of the Partnership Merger (the "Partnership Merger
Effective Time"), (i) each unit of partnership interest in the Taubman Operating
Partnership (each, a "Taubman OP Unit") issued and outstanding immediately prior
to the Partnership Merger Effective Time held by a limited partner of the
Taubman Operating Partnership who is not a member of the Taubman Family (defined
as the "Titanium Family" in the Amended Merger Agreement) (the "Minority
Partners") will be converted into the right to receive, at the election of such
Minority Partner, the Common Stock Merger Consideration (as defined below) or
0.5703 limited partnership units in the Simon Operating Partnership; (ii)
certain Taubman OP Units issued and outstanding immediately prior to the
Partnership Merger Effective Time held by a member of the Taubman Family will
remain outstanding as units of partnership interest in the Surviving Taubman
Operating Partnership; and (iii) all other Taubman OP Units issued and
outstanding immediately prior to the Partnership Merger Effective Time held by a
member of the Taubman Family will be converted into the right to receive the
Common Stock Merger Consideration. In addition, at the Partnership Merger
Effective Time, each outstanding incentive unit in the Taubman Operating
Partnership will vest and be converted into a Taubman OP Unit, to be treated in
the Partnership Merger in the same manner as the Taubman OP Units held by the
Minority Partners. The membership interests of Merger Sub 2 issued and
outstanding immediately prior to the Partnership Merger Effective Time will
automatically be converted into a number of units of partnership interest in
Surviving Taubman Operating Partnership such that following the Partnership
Merger, Merger Sub 1 and TCO will collectively own 80% (assuming, for purposes
of this calculation, that the Taubman OP Units issuable under the Option
Deferral Agreement (as defined in the Amended Merger Agreement) among TCO, the
Taubman Operating Partnership and Robert S. Taubman are outstanding interests of
Surviving Taubman Operating Partnership) of the outstanding interests of
Surviving Taubman Operating Partnership.
Pursuant to the terms and conditions in the Amended Merger Agreement, at the
effective time of the REIT Merger (the "REIT Merger Effective Time"), (i) each
share of common stock, $0.01 par value per share, of TCO (the "TCO Common
Stock") issued and outstanding immediately prior to the REIT Merger Effective
Time will be converted into the right to receive $43.00 in cash (the "Common
Stock Merger Consideration"); and (ii) each share of Series B Non-Participating
Convertible Preferred Stock, $0.001 par value per share, of TCO (the "TCO Series
B Preferred Stock") will be converted into the right to receive an amount in
cash equal to the Common Stock Merger Consideration, divided by 14,000.
Immediately prior to the REIT Merger Effective Time, TCO will issue a redemption
notice and cause funds to be set aside to pay the redemption price for each
share of Series J Cumulative Redeemable Preferred Stock, no par value, of TCO
(the "TCO Series J Preferred Stock") and each share of Series K Cumulative
Redeemable Preferred Stock, no par value, of TCO (the "TCO Series K Preferred
Stock"), at their respective liquidation preference of $25.00 plus all
accumulated and unpaid dividends to, but not including, the redemption date of
such share (the "Redemption").
In addition, at the REIT Merger Effective Time, (i) each outstanding restricted
stock unit award of TCO (each, a "TCO RSU") and each outstanding performance
stock unit award (each, a "TCO PSU") granted under the Taubman Stock Plans
(defined as the "Titanium Stock Plans" in the Amended Merger Agreement) that
vest in accordance with its terms in connection with the closing of the Mergers
will automatically convert into the right to receive the Common Stock Merger
Consideration; (ii) each outstanding TCO RSU and TCO PSU that is not eligible to
vest in accordance with its terms at the REIT Merger Effective Time will be
converted into a cash substitute award to be paid (A) with respect to any such
award granted prior to 2020, in accordance with the same service-vesting
schedule that applied to the original TCO RSU or TCO PSU award and (B) with
respect to any such award granted in 2020, in accordance with the same vesting
schedule (including performance-vesting conditions) that applied to the original
TCO RSU or TCO PSU award; (iii) each outstanding share of deferred TCO Common
Stock (each, a "TCO DSU") granted under the Taubman Stock Plans will be
converted into the right to receive the Common Stock Merger Consideration; and
(iv) each dividend equivalent right granted in tandem with any TCO RSU or TCO
PSU (each a "TCO DER") will be treated in the same manner as the outstanding TCO
RSU or TCO PSU to which such TCO DER relates.
Finally, at the effective time of the Conversion, the Option Deferral Agreement
(as defined in the Amended Merger Agreement) will be deemed to be amended so
that each Option Deferred Unit (as defined in the Amended Merger Agreement) will
represent the right to receive, following the Conversion, one Reorganized
Taubman OP Unit (defined as "Reorganized Titanium OP Unit" in the Amended Merger
Agreement), and will remain subject to all other terms and conditions of the
Option Deferral Agreement.
Following the Mergers and the Conversion, the Simon Operating Partnership will
own 100% of the outstanding equity of Surviving TCO, Surviving TCO will own 80%
of the limited liability company interests of the Joint Venture, and the Taubman
Family will own the remaining 20% (assuming, for purposes of this calculation,
that Taubman OP Units issuable under the Option Deferral Agreement are
outstanding interests of Surviving Taubman Operating Partnership) of the limited
liability company interests the Joint Venture. Surviving TCO and the Taubman
Family will enter into an Operating Agreement (as defined below) with respect to
the Joint Venture at the time of the Conversion in the form attached as Exhibit
B to the Amended Merger Agreement and described further below.
Conditions to the Merger
The consummation of the Mergers is subject to the approval of the REIT Merger by
(i) the holders of at least two-thirds of the outstanding shares of TCO Common
Stock and TCO Series B Preferred Stock (voting together as a single class); (ii)
the holders of at least a majority of TCO Series B Preferred Stock; and (iii)
the holders of at least a majority of the outstanding shares of TCO Common Stock
and TCO Series B Preferred Stock (voting together as a single class and
excluding the outstanding shares of TCO Common Stock and TCO Series B Preferred
Stock owned of record or beneficially by the Taubman Family). In addition, the
consummation of the Mergers is subject to certain other customary closing
conditions, including, among others, the approval of the Partnership Merger by
the partners holding at least a majority of the aggregate percentage interests
in the Taubman Operating Partnership (other than those held by TCO) (which
approval has been obtained), the absence of certain legal impediments to the
consummation of the Mergers and material compliance by the Simon Parties and the
Taubman Parties with their respective obligations under the Amended Merger
Agreement. The Amended Merger Agreement, as compared to the Original Merger
Agreement, removes the condition requiring the absence of a material adverse
effect with respect to TCO. The obligations of the parties to consummate the
Mergers are not subject to any financing condition or the receipt of any
. . .
Item 7.01 Regulation FD Disclosure
On November 15, 2020, Simon and TCO, issued a joint press release announcing the
execution of the Amended Merger Agreement. The full text of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information furnished under this Item 7.01 of this Current Report on Form
8-K, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section.
Item 9.01 Financial Statements and Exhibits
Financial Statements:
None
Exhibits:
Exhibit
No. Description
2.1* Amended and Restated Agreement and Plan of Merger, dated as of
November 14, 2020, by and among the Taubman Parties and the Simon
Parties
10.1 Amended and Restated Voting Agreement, dated as of November 14,
2020, by and among Simon, the Simon Operating Partnership and the
other parties thereto
99.1 Press release of Simon and TCO, dated November 15, 2020
The cover page from this Current Report on Form 8-K formatted in
104 Inline XBRL (included as Exhibit 104)
* Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to
the SEC upon request.
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