Simon, Taubman Dispute Gist of Ruling

A Michigan judge has issued a ruling in the Simon Property Group/Westfield America case against Taubman Centers, and both sides are interpreting the ruling as favorable to their own case.The outcome will depend on whether the Taubmans can vote series B stock they own and block the takeover attempt. According to Simon/Westfield, Judge Victoria Roberts ruled that "the 33.6% Series B shares owned by the Taubman family and friends may not be voted until approved by a majority of disinterested public shareholders in compliance with the Michigan Control Share Act." However, the Taubmans contend that the court rejected Simon's claim that they cannot vote their shares and enjoined only the voting of "those shares represented in the voting agreements previously entered with Robert Taubman," representing only about 3% of the shares (rather than the entire 33.6%). This interpretation would mean that the Taubmans could continue to block the takeover attempt. Analysts with JP Morgan say the chances for a sale/takeover of Taubman "are higher than they were a few months ago." The market also appears to take this view, as Taubman common stock is now trading closer to the $20 price offered by Simon/Westfield. However, JP Morgan said it expects the Taubmans to continue to "fight hard, and this process will likely continue to drag on for some time."