Simon, Taubman Join Forces To Save The Mall

As retail owners face the challenge of decreased foot traffic and store closures brought on by the rise of eCommerce, mall owners have been aiming to change their properties with the introduction of dining options, entertainment and other features. And two mall owners are joining forces amid this trend, The Wall Street Journal reported on Monday (Feb. 10).

Simon Property Group Inc. intends to take over control of Taubman Centers Inc., a competing owner of malls. Simon, which is based in Indiana, would pay $52.50 in cash per share for Taubman’s shares that would provide it control over the subsidiary of Taubman that owns all of the firm’s retail property interests. Michigan-based Taubman manages, owns or leases 26 malls in Asia and the U.S., with the inclusion of Detroit-area Twelve Oaks Mall and Denver’s Cherry Creek Shopping Center. 

Simon, for its part, controlled a stake in or owned 204 U.S. properties as of Sept. 30, 2019, including Boston’s Copley Place and Florida’s Dadeland Mall. The Taubman family will sell approximately a one-third of its ownership interest in Taubman and will still be a 20 percent owner in the operating subsidiary of its eponymous real estate company. 

Simon will have 80 percent ownership of the Taubman operating entity at the time that the transaction finishes. The deal puts a $3.21 billion value on Taubman, with the number of shares outstanding in late October. Taubman’s stock finished up at $34.67 Friday, and shares jumped 52 percent on Monday in premarket trading.

In separate news, Simon Property Group teamed with Retail-as-a-Service (RaaS) platform Guesst on a multi-brand experiential retail concept per news in November. The GuesstHouse was to roll out at The Westchester shopping mall of Simon in New York — just in time for the holiday shopping season.  

The concept, which was said to be 3,200 square feet, was to spotlight indie, heritage and direct-to-consumer products and services throughout multiple luxury categories with the inclusion of clothing, home goods and other special “giftable” merchandise. A variety of professionals, such as designers and stylists, were to be on hand to assist customers at the new GuesstHouse.