Simon Property MAE Litigation

In February 2020, Simon Property Group (Simon) and Taubman Centers (Taubman) entered into a merger agreement in which Simon agreed to acquire an 80% ownership interest in Taubman by acquiring all of Taubman’s common stock for $52.50 per share and one-third of the Taubman family’s 30% ownership interest for a total consideration of approximately $3.6 billion. Simon filed a complaint in June 2020 alleging that Taubman had suffered a material adverse effect (MAE) that allowed Simon to terminate the merger and refuse to close without penalty. Simon claimed that Taubman was affected disproportionately by the COVID-19 pandemic as compared to other companies that operated in the same industries as Taubman.

Counsel for Simon retained Compass Lexecon and several of our experts. Compass Lexecon Senior Consultant Professor Kenneth Lehn was retained to analyze Taubman’s actual and expected financial performance in light of the pandemic. Professor Dhruv Grewal was retained to analyze the impact of the COVID-19 pandemic on Taubman and the industry in which it operates. Compass Lexecon Senior Consultant Robert Daines was retained to evaluate the economic evidence regarding industry definitions in light of the contract language. Jonathan Foster was retained to evaluate certain Taubman financing actions during the COVID-19 pandemic. Compass Lexecon also supported several medical and epidemiology experts.

On November 15, 2020, shortly before trial, the parties reached an agreement to move forward with the deal at a lower price of $43 per share, a reduction of 18% from the initially agreed upon price.

We worked with Lewis Clayton, Bruce Birenboim, Brette Tannenbaum, Paul Paterson, Arianna Markel, and others of Paul Weiss and Thomas Cranmer, Michael Palizzi, and others of Miller, Canfield, Paddock and Stone, P.L.C. The Compass Lexecon team was led by Cliff Ang, with assistance from Cliff Ang, Ed Grgeta, Todd Kendall, Jessica Mandel, Avisheh Mohsenin, Robin Stahl, Samuel Hollander, Kevin Hartt, and others.