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Simon Nixes Taubman’s Bid for Forum Shops

Simon Property Group says it will acquire its outside partner’s 42 percent interest in the Forum Shops at Caesar’s Palace in Las Vegas for $174 million. Greenwhich, Conn.-based The Gordon Group, Simon’s outside partner in the center, announced in January it was unhappy with the partnership and that it had formed a joint venture with Taubman Centers. The agreement triggered a buy-sell provision compelling Simon to either buy out Gordon Group or sell its own interest in the Forum Shops.

The Forum Shops average tenant sales exceed $1,100 per square foot. A 175,000-square-foot expansion—financed by Simon—will open in fall 2004 and upon completion, a stabilized 12 percent return in excess on the incremental investment is expected.

Simon, along with partner Westfield America, is attempting a hostile takeover of Taubman. The deadline for the takeover is Valentine’s Day, this Friday, when Simon says it will abort its plans if two-thirds of Taubman common stock shareholders fail to accept the $20-per-share offer. If Simon does abandon the takeover, Legg Mason analyst David Fick says the company would lose a minimum of $4 million in expenses.

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