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OMB APPROVAL
OMB Number: 3235-0515
Expires: April 30, 2005
Estimated average burden
hours per response: 43.5
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO/A
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
TAUBMAN CENTERS, INC.
(Name of Subject Company (Issuer))
SIMON PROPERTY ACQUISITIONS, INC.
SIMON PROPERTY GROUP, INC.
(Names of Filing Persons (Offerors))
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
876664103
(CUSIP Number of Class of Securities)
James M. Barkley, Esq.
Simon Property Group, Inc.
National City Center
115 West Washington Street
Suite 15 East
Indianapolis, IN 46024
Telephone: (317) 636-1600
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
----------
Copies to:
Steven A. Seidman, Esq.
Robert B. Stebbins, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Telephone: (212) 728-8000
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$1,119,305,574 $223,861.11
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* Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying $18.00, the per share tender offer price, by
62,183,643 shares of Common Stock, consisting of (i) 52,205,122 outstanding
shares of Common Stock, (ii) 2,269 shares of Common Stock issuable upon
conversion of 31,767,066 outstanding shares of Series B Non-Participating
Convertible Preferred Stock, (iii) 7,097,979 shares of Common Stock
issuable upon conversion of outstanding partnership units of The Taubman
Realty Group, Limited Partnership ("TRG") and (iv) 2,878,273 shares of
Common Stock issuable upon conversion of outstanding options (each of which
entitles the holder thereof to purchase one partnership unit of TRG which,
in turn, is convertible into one share of Common Stock), based on the
Registrant's Schedule 14D-9 filed on December 11, 2002 and the Registrant's
Quarterly Report on Form 10-Q for the period ended September 30, 2002.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th
of one percent of the value of the transaction.
|X| Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $221,813.06 Filing Party: Simon Property Group, Inc.
Form or Registration No.: Schedule TO Date Filed: December 5, 2002
|_| Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
|_| Check the appropriate boxes below to designate any transactions to which
the statement relates.
|X| third-party tender offer subject to Rule 14d-1.
|_| issuer tender offer subject to Rule 13e-4.
|_| going-private transaction subject to Rule 13e-3.
|_| amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting
the results of the tender offer: |_|
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SCHEDULE TO
This Amendment No. 1 amends and supplements the Tender Offer
Statement on Schedule TO filed with the Securities and Exchange Commission (the
"Commission") on December 5, 2002 (the "Schedule TO") relating to the offer by
Simon Property Acquisitions, Inc., a Delaware corporation (the "Purchaser") and
wholly owned subsidiary of Simon Property Group, Inc., a Delaware corporation
("SPG Inc."), to purchase all of the outstanding shares of common stock, par
value $.01 per share (the "Common Stock" or the "Shares"), of Taubman Centers,
Inc. (the "Company") at a purchase price of $18.00 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated December 5, 2002 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the "Offer"). This Amendment
No. 1 to the Schedule TO is being filed on behalf of the Purchaser and SPG Inc.
Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Offer to Purchase and the Schedule TO.
The item numbers and responses thereto below are in accordance
with the requirements of Schedule TO.
Item 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
On December 16, 2002, SPG Inc. and the Purchaser filed a
preliminary solicitation statement under cover of Schedule 14A pursuant to the
Securities Exchange Act of 1934, as amended (the "Preliminary Solicitation
Statement") with the Commission relating to the solicitation of agent
designations from the Company's shareholders in connection with the calling of a
special meeting of the Company's shareholders. A copy of the Preliminary
Solicitation Statement is filed herewith as Exhibit (a)(5)(B). The full text of
a press release, dated December 16, 2002, issued by SPG Inc. with respect to the
filing of the Preliminary Solicitation Statement is filed herewith as Exhibit
(a)(5)(C).
Item 11. ADDITIONAL INFORMATION.
The Offer to Purchase is conditioned on, among other things,
"the Purchaser being satisfied, in its sole discretion, that Chapter 7A of the
MBCA (the "Michigan Business Combination Act") will not prohibit for any period
of time, or impose any shareholder approval with respect to, the Proposed Merger
or any other "Business Combination" (as defined in the Michigan Business
Combination Act) involving the Company and the Purchaser or any other affiliate
of SPG Inc." (such condition, the "Business Combination Condition"). In the
Schedule 14D-9 filed by the Company with the Commission on December 11, 2002
(the "Schedule 14D-9"), the Company disclosed that the requirements of the
Michigan Business Combination Act do not currently apply to it. As a result, SPG
Inc. and the Purchaser believe that, as of the current date, the Business
Combination Condition is satisfied. Nonetheless, in the Schedule 14D-9 the
Company indicated its belief that the Company may at any time opt into the
Michigan Business Combination Act through further action by the Company Board.
It is possible that, if the Company, through an action of the Company Board or
otherwise, again becomes subject to the requirements of the Michigan Business
Combination Act, the Business Combination Condition will need to be satisfied
again, and continue to be satisfied, before the Offer can be consummated.
The Offer to Purchase also is conditioned on, among other
things, "full voting rights for all Shares to be acquired by the Purchaser
pursuant to the Offer having been approved by the Company's shareholders under
Chapter 7B of the MBCA (the "Michigan Control Share Act") or the Purchaser being
satisfied, in its sole discretion, that the Michigan Control Share Act is
invalid or otherwise inapplicable to the Shares to be acquired by the Purchaser
in the Offer" (such condition, the "Control Share Condition"). As reported in
the Schedule 14D-9, on December 10, 2002, the Company Board amended the
Company's By-Laws to opt out of the Michigan Control Share Act. Accordingly, SPG
Inc. and the Purchaser believe that, as of the current date, the Control Share
Condition has been satisfied. Notwithstanding the foregoing, SPG Inc. and the
Purchaser believe there is a possibility that the Company could, through a
further amendment to its By-laws, opt in to the Michigan Control Share Act. If
the Company, through a further amendment to its By-laws or otherwise, again
becomes subject to the requirements of the Michigan Control Share Act, the
Control Share Condition will need to be satisfied again, and continue to be
satisfied, before the Offer can be consummated.
Item 12. EXHIBITS.
(a)(5)(B) Preliminary Solicitation Statement in respect of Taubman Centers,
Inc. filed by Simon Property Group, Inc. and Simon Property
Acquisitions, Inc. on December 16, 2002.
(a)(5)(C) Press release issued by Simon Property Group, Inc., dated
December 16, 2002
(a)(5)(D) Press release issued by Simon Property Group, Inc., dated
December 11, 2002
SIGNATURE
After due inquiry and to the best of their knowledge and belief, the
undersigned hereby certify as of December 16, 2002 that the information set
forth in this statement is true, complete and correct.
SIMON PROPERTY GROUP, INC.
By: /s/ JAMES M. BARKLEY
--------------------
Name: James M. Barkley
Title: Secretary and General Counsel
SIMON PROPERTY ACQUISITIONS, INC.
By: /s/ JAMES M. BARKLEY
--------------------
Name: James M. Barkley
Title: Secretary and Treasurer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(5)(B) Preliminary Solicitation Statement in respect of Taubman
Centers, Inc. filed by Simon Property Group, Inc. and
Simon Property Acquisitions, Inc. on December 16, 2002.
(a)(5)(C) Press release issued by Simon Property Group, Inc.,
dated December 16, 2002
(a)(5)(D) Press release issued by Simon Property Group, Inc.,
dated December 11, 2002
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OMB APPROVAL
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OMB NUMBER 3235-0059
EXPIRES: AUGUST 31, 2004
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
TAUBMAN CENTERS, INC.
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(Name of Registrant as Specified In Its Charter)
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $.01 per share, of Taubman Centers, Inc.
(2) Aggregate number of securities to which transaction applies: based
on the Registrant's Schedule 14D-9 filed on December 11, 2002 and
the Registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 2002, 62,183,643 shares of Common Stock,
consisting of (i) 52,205,122 outstanding shares of Common Stock,
(ii) 2,269 shares of Common Stock issuable upon conversion of the
31,767,066 outstanding shares of Series B Non-Participating
Convertible Preferred Stock, (iii) 7,097,979 shares of Common
Stock issuable upon conversion of outstanding partnership units of
The Taubman Realty Group Limited Partnership ("TRG") and (iv)
2,878,273 shares of Common Stock issuable upon the conversion of
outstanding options (each of which entitles the holder thereof to
purchase one partnership unit of TRG which, in turn, is
convertible into one share of Common Stock).
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): As
provided by Rule 0-11(c), the filing fee is based upon 1/50th of
1% of $18.00, the amount offered to be paid per share of Common
Stock in connection with the tender offer being made in connection
with this proxy solicitation, multiplied by 62,183,643 shares of
Common Stock. (4) Proposed maximum aggregate value of transaction:
$1,119,305,574.
(5) Total fee paid: $223,861.11.
/ / Fee paid previously with preliminary materials.
/X/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $223,861.11.
(2) Form, Schedule or Registration Statement No.: Schedule TO, File
No. 005-42862 and Amendment No. 1 to the Schedule TO.
(3) Filing Party: Simon Property Group, Inc.; Simon Property
Acquisitions, Inc.
(4) Dates Filed: December 5, 2002 and December 16, 2002.
Preliminary Materials dated December 16, 2002
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This proxy statement will be revised to reflect actual facts at the
time of filing of the definitive proxy statement.
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SOLICITATION OF AGENT DESIGNATIONS
IN CONNECTION WITH THE
CALL OF A SPECIAL MEETING OF SHAREHOLDERS
OF
TAUBMAN CENTERS, INC.
PRELIMINARY SOLICITATION STATEMENT
OF
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
TO THE SHAREHOLDERS OF TAUBMAN CENTERS, INC.:
This Solicitation Statement (this "Solicitation Statement") and the
enclosed GREEN Appointment of Designated Agents ("Agent Designations") are being
furnished to holders of outstanding shares of common stock, par value $.01 per
share ("Common Stock" or the "Shares"), and Series B Non-Participating
Convertible Preferred Stock, par value $.001 per share ("Series B Preferred
Stock"), of Taubman Centers, Inc., a Michigan corporation (the "Company"), in
connection with the solicitation (this "Solicitation") of Agent Designations by
and on behalf of Simon Property Group, Inc. ("SPG Inc."), a Delaware corporation
and Simon Property Acquisitions, Inc. (including any successor thereto, the
"Purchaser" and, together with SPG Inc., "SPG"), a Delaware corporation and a
wholly owned subsidiary of SPG Inc., to provide for the call of a special
meeting of shareholders of the Company for the purposes described herein (the
"Special Meeting"). The date of this Solicitation Statement is January __, 2003.
This Solicitation Statement and the enclosed GREEN Agent Designation are
first being sent or given to the Company's shareholders on or about January __,
2003.
- --------------------------------------------------------------------------------
IMPORTANT
THE PURPOSE OF THIS SOLICITATION IS TO FACILITATE THE CONSUMMATION OF THE
PURCHASER'S PENDING TENDER OFFER FOR ALL OF THE OUTSTANDING SHARES AT A PRICE OF
$18.00 PER SHARE IN CASH BY URGING YOU TO CALL THE SPECIAL MEETING. FOR A
DESCRIPTION OF THE TERMS AND CONDITIONS OF THE OFFER (AS SUCH TERM IS DEFINED
BELOW), SEE "THE TENDER OFFER AND ACCOMPANYING LITIGATION."
OVER THE PAST SEVERAL MONTHS, THE BOARD OF DIRECTORS OF THE COMPANY (THE
"COMPANY BOARD") UNILATERALLY HAS TAKEN ACTIONS TO DISENFRANCHISE THE COMPANY'S
COMMON SHAREHOLDERS AND FRUSTRATE THEIR ABILITY TO RECEIVE $18.00 PER SHARE IN
CASH IN THE OFFER. SPG BELIEVES THAT THE COMPANY'S COMMON SHAREHOLDERS, AND NOT
THE TAUBMAN FAMILY, SHOULD HAVE THE OPPORTUNITY TO DECIDE THE FUTURE OF THE
COMPANY AND TO RECEIVE $18.00 PER
- --------------------------------------------------------------------------------
i
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SHARE IN CASH FOR THEIR SHARES IN THE OFFER. THEREFORE, SPG URGES YOU RETURN THE
GREEN AGENT DESIGNATION TO FACILITATE THE CALLING OF THE SPECIAL MEETING.
AT THE SPECIAL MEETING, THE COMPANY'S SHAREHOLDERS WILL HAVE THE OPPORTUNITY TO
VOTE ON PROPOSALS TO REMOVE IMPEDIMENTS TO THE OFFER, INCLUDING A PROPOSAL TO
AMEND THE COMPANY'S RESTATED ARTICLES OF INCORPORATION (AS AMENDED, THE
"CHARTER") IN ORDER TO SATISFY THE EXCESS SHARE CONDITION (AS DEFINED BELOW) TO
THE OFFER.
BY RETURNING THE GREEN AGENT DESIGNATION, YOU WILL FACILITATE THE CALLING OF THE
SPECIAL MEETING AT WHICH THE COMPANY'S SHAREHOLDERS MAY TAKE ACTIONS THAT WILL
EXPRESS TO THE COMPANY BOARD THE SHAREHOLDERS' DESIRE TO ACCEPT THE OFFER AND TO
HAVE THE COMPANY BOARD TAKE ACTIONS TO MAKE THAT POSSIBLE. FOR A DESCRIPTION OF
THE ACTIONS PROPOSED TO BE TAKEN AT THE SPECIAL MEETING, SEE "THE SPECIAL
MEETING."
- --------------------------------------------------------------------------------
Executed Agent Designations should be delivered, by fax or by mail (using
the enclosed envelope), to SPG's Information Agent, MacKenzie Partners, Inc.
("MacKenzie Partners"), for delivery to the Company, on or before January __,
2003 or such later date as SPG may from time to time establish in accordance
with the procedures set forth under the heading "Agent Designation Procedures."
PLEASE SIGN, DATE AND RETURN THE ENCLOSED GREEN AGENT DESIGNATION IN THE
ENCLOSED ENVELOPE TODAY!
SIGNING AN AGENT DESIGNATION WILL NOT AFFECT YOUR ABILITY TO VOTE FOR OR
AGAINST ANY PROPOSALS PRESENTED AT THE SPECIAL MEETING.
Pursuant to this Solicitation Statement, SPG is soliciting Agent
Designations from the holders of outstanding shares of Common Stock and Series B
Preferred Stock to call the Special Meeting. By signing an Agent Designation you
will designate specified persons as your agents and will authorize those persons
to call the Special Meeting, to be held at a place and time to be determined,
within approximately ___ days following the date on which SPG receives Agent
Designations from the Requisite Holders (as defined below) or the date on which
the circuit court of Oakland County, Michigan orders that the Special Meeting be
called and held. At the Special Meeting, SPG will, among other things, ask you
to consider and vote upon the proposals described below under the heading "The
Special Meeting - The Proposals" (the "Proposals"). The purpose of the Proposals
is to facilitate the consummation of the Offer. The Proposals include:
o a proposal to amend the Charter to provide that the purchase by
the Purchaser of all of the Shares tendered pursuant to the Offer
would not trigger the Excess Share Provision (as defined below)
(the "Excess Share Proposal"); and
o a proposal urging the Company Board to pass a resolution approving
the Offer in order to satisfy the Business Combination Condition
(as defined below) if the Company Board opts into the Michigan
Business Combination Act (as defined below).
ii
Two-thirds (2/3) of the voting power of the Company's voting securities
is needed to approve the Excess Share Proposal. The Taubman family purports to
control 33.6% of the voting power of the Company's voting securities, primarily
through its ownership of Series B Preferred Stock, giving them an effective veto
over any potential takeover. SPG , as well as other shareholders of the Company,
have commenced litigation regarding the legality of the voting rights of the
Series B Preferred Stock and the New 3% Shares (as defined below) held or
controlled by the Taubman family and the ability of the Taubman family to vote
these shares so as to prevent the Company's common shareholders from receiving
$18.00 per Share in cash pursuant to the Offer.
SPG BELIEVES THAT THE COMPANY BOARD (OR A COMMITTEE OF ITS DIRECTORS
INDEPENDENT OF THE HOLDERS OF THE SERIES B PREFERRED STOCK) AND THE TAUBMAN
FAMILY, EACH AS FIDUCIARIES FOR THE COMMON SHAREHOLDERS, COULD AND SHOULD TAKE
ALL NECESSARY ACTIONS TO REMOVE IMPEDIMENTS TO THE CONSUMMATION OF THE OFFER.
For the Special Meeting to be called and held pursuant to the Company's
by-laws, Agent Designations in favor of calling the Special Meeting must be
executed by and received from the record holder or holders of not less than 25%
of all of the shares entitled to vote at such meeting (the "Requisite Holders").
Alternatively, if Agent Designations in favor of calling the Special Meeting are
executed by and received from the record holder or holders of not less than 10%
of all of the shares of capital stock entitled to vote at such meeting,
application may be made, pursuant to Section 403 of the Michigan Business
Corporation Act to the circuit court of Oakland County, Michigan (the county in
which the Company's principal office is located), to order, for good cause
shown, that the Special Meeting be called and held.
IF YOU BELIEVE THAT YOU (AND NOT THE TAUBMAN FAMILY) SHOULD HAVE THE
OPPORTUNITY TO DECIDE THE FUTURE OF YOUR COMPANY AND THAT YOU SHOULD HAVE THE
OPPORTUNITY TO RECEIVE $18.00 PER SHARE IN CASH FOR ALL OF YOUR SHARES, SPG
URGES YOU TO SIGN AND RETURN YOUR GREEN AGENT DESIGNATION PROMPTLY.
This Solicitation is being made by SPG, and not on behalf of the Company
Board. At this time, SPG is only soliciting your Agent Designation for the
purpose of calling the Special Meeting. SPG is not currently seeking your proxy,
consent or authorization for approval of the Proposals at the Special Meeting.
After the Special Meeting has been called, SPG will send you proxy materials
urging you to vote in favor of the Proposals.
YOUR AGENT DESIGNATION IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES
YOU OWN. FAILURE TO EXECUTE A GREEN AGENT DESIGNATION HAS THE SAME EFFECT AS
OPPOSING THE CALL OF THE SPECIAL MEETING AND MAY IMPEDE CONSUMMATION OF THE
OFFER AND THEREBY THE ABILITY OF THE COMMON SHAREHOLDERS TO RECEIVE $18.00 PER
SHARE IN CASH FOR THEIR SHARES PURSUANT TO THE OFFER.
If your Shares are registered in your own name, please sign, date and
mail the enclosed GREEN Agent Designation to MacKenzie Partners in the
postage-paid envelope provided. If any of your Shares are held in the name of a
brokerage firm, bank, bank nominee or other institution, only the brokerage
firm, bank, bank nominee or other institution can execute an Agent Designation
for such Shares and will do so only upon receipt of specific instructions from
the beneficial owner of such Shares. Accordingly, each shareholder who holds
Shares through a nominee such as a brokerage firm, bank, bank nominee or other
institution must contact the
iii
person responsible for the shareholder's account and advise that person to
execute and return the accompanying GREEN Agent Designation. SPG urges you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of such instructions to SPG, care of MacKenzie Partners at
the address below, so that SPG will be aware of all instructions given and can
attempt to ensure that such instructions are followed.
IF YOU HAVE ANY QUESTIONS ABOUT EXECUTING OR DELIVERING YOUR GREEN AGENT
DESIGNATION OR REQUIRE ASSISTANCE, PLEASE CONTACT:
[MACKENZIE PARTNERS, INC. LOGO]
105 MADISON AVENUE
NEW YORK, NEW YORK 10016
CALL COLLECT: (212) 929-5500
OR
CALL TOLL-FREE: (800) 322-2885
FAX: (212) 929-0308
iv
TABLE OF CONTENTS
PAGE
----
INTRODUCTION............................................................ 1
THE TENDER OFFER AND ACCOMPANYING LITIGATION............................ 4
BACKGROUND OF THE TENDER OFFER.......................................... 7
THE SPECIAL MEETING..................................................... 12
GENERAL........................................................ 12
THE PROPOSALS.................................................. 13
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS...................... 15
AGENT DESIGNATION PROCEDURES............................................ 16
CERTAIN INFORMATION ABOUT THE COMPANY................................... 18
CERTAIN INFORMATION ABOUT SPG INC., SPG L.P. AND THE PURCHASER.......... 19
SOLICITATION EXPENSES AND PROCEDURES.................................... 20
SHAREHOLDER PROPOSALS................................................... 21
OTHER INFORMATION....................................................... 21
SCHEDULE I.............................................................. I-1
SCHEDULE II............................................................. II-1
SCHEDULE III............................................................ III-1
INTRODUCTION
On October 16, 2002, David Simon, Chief Executive Officer of Simon
Property Group, Inc. ("SPG Inc."), a Delaware corporation and the general
partner and the owner of the majority of the equity interests of Simon Property
Group, L.P., a Delaware limited partnership ("SPG L.P."), called Robert S.
Taubman, Chairman of the Board of Directors, President and Chief Executive
Officer of Taubman Centers, Inc., a Michigan corporation (the "Company"), to
express SPG Inc.'s interest in pursuing a business combination between SPG Inc.
and the Company. Later that day, Mr. Simon sent a letter to Mr. Taubman
containing a written proposal describing SPG Inc.'s interest in a business
combination with the Company.
On October 22, 2002, SPG Inc. delivered a letter to the Company
containing an offer to acquire the Company by SPG Inc. in a negotiated
transaction, in which holders of all the outstanding shares of common stock, par
value $.01 per share (the "Common Stock" or the "Shares"), of the Company would
receive $17.50 in cash per share. The terms of the offer further provided that
SPG Inc. would be prepared to purchase, either for cash or through an exchange
of partnership interests in SPG L.P. all of the limited partnership interests in
The Taubman Realty Group Limited Partnership ("Taubman L.P."), the Company's
operating partnership and all of the Company's Series B Non-Participating
Convertible Preferred Stock, par value $.001 per share ("Series B Preferred
Stock"). On October 28, 2002, the Board of Directors of the Company (the
"Company Board") rejected SPG Inc.'s offer, stating that any discussions
regarding a transaction would not be productive because the Taubman family (with
its purported greater than 30% voting stake) had informed the Company Board that
it is categorically opposed to the sale of the Company.
On November 13, 2002, SPG Inc. delivered a letter to the Company Board
setting forth the terms of its proposed business combination with the Company,
and calling on the Company Board for assistance in surmounting the obstacles to
such a business combination presented by the Company's corporate governance
structure. This letter was publicly disclosed by means of a press release.
Within one hour of SPG Inc.'s press release, the Company issued a press release
that categorically rejected SPG Inc.'s proposal.
On December 5, 2002, Simon Property Acquisitions, Inc. (including any
successor thereto, the "Purchaser" and, together with SPG Inc., "SPG"), a
Delaware corporation and a wholly owned subsidiary of SPG Inc., commenced a
tender offer to purchase all the outstanding Shares at a price of $18.00 per
Share, net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in an Offer to Purchase
dated December 5, 2002 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer").
On December 11, 2002, the Company filed a Schedule 14D-9 (the "Company
Schedule 14D-9") with the Securities and Exchange Commission (the "Commission")
recommending that the Company's common shareholders reject the Offer. The
recommendation was made despite the fact that the Offer Price represents a 35%
premium over the $13.32 closing price of the Common Stock on October 15, 2002
(the last trading day prior to SPG Inc.'s initial private communication to the
Company expressing its interest in pursuing a business combination). SPG does
not believe that the recommendation is in the best interests of the Company's
common
1
shareholders because SPG believes the Company's common shareholders should be
given the opportunity to decide for themselves whether to tender their Shares
and receive $18.00 in cash per Share in the Offer.
The Taubman family purportedly holds a significant voting stake in the
Company that may impede the potential sale of the Company, including the
satisfaction of certain conditions to the consummation of the Offer. SPG
believes that the Taubman family's purported control position was improperly
granted in connection with a restructuring transaction in 1998 that was not
approved by the Company's common shareholders or adequately disclosed. The
Taubman family's purported control position results from the issuance in 1998
of approximately 32 million shares of Series B Preferred Stock to holders of
Taubman L.P. partnership units (other than the Company), approximately 25
million of which were issued to Taubman family members and affiliates. The
issuance of the Series B Preferred Stock purportedly increased the voting
power of the Taubman family in the Company from less than 1% to in excess of
30% and the exercise of options by the Taubman family and the grant of
irrevocable proxies by several close associates of the Taubman family
purportedly further increased their voting power to 33.6%, giving the Taubman
family an effective veto over any potential takeover. Moreover, the assertion
that the Taubman family's Series B Preferred Stock has voting rights, in the
absence of shareholder approval, conflicts with the requirements of Chapter
7B (the "Michigan Control Share Act") of the Michigan Business Corporation
Act (the "MBCA").
On December 5, 2002, SPG filed a complaint in the United States District
Court for the Eastern District of Michigan (the "Complaint") against the
Company, the Company Board and certain members of the Taubman family. Among
other things, the Complaint seeks to invalidate the veto power over the Offer
that the Taubman family purports to wield, and upon which the Company Board is
implicitly relying. SPG also asserts in the Complaint that the defendants are
violating Michigan law by engaging in conduct that is designed to impede the
Offer and injure the Company's shareholders.
If the Series B Preferred Stock held or controlled by the Taubman family
is not invalidated and the Taubman family continues to oppose the Offer, unless
the Company Board takes all necessary actions to remove the impediments to the
consummation of the Offer, the conditions to the consummation of the Offer will
not be able to be satisfied and the Company's common shareholders will not have
the opportunity to receive $18.00 per Share in cash pursuant to the Offer.
Therefore, SPG urges the Company Board to take the actions described below to
facilitate the consummation of the Offer.
The purpose of this Solicitation is to facilitate the consummation of the
Offer by urging you to call the Special Meeting. At the Special Meeting, SPG
will, among other things, ask you to consider and vote upon the proposals
described below under the heading "The Special Meeting - The Proposals" (the
"Proposals"). The Proposals include:
o a proposal to amend the Company's Restated Articles of
Incorporation (as amended, the "Charter") to provide that the
purchase by the Purchaser of all of the Shares tendered pursuant
to the Offer would not trigger the Excess Share Provision (as
defined below) (the "Excess Share Proposal"); and
o a proposal urging the Company Board to pass a resolution approving
the Offer in order to satisfy the Business Combination Condition
(as defined below) if the
2
Company Board opts into Chapter 7A (the "Michigan Business
Combination Act of the MBCA.
Two-thirds (2/3) of the voting power of the Company's voting securities
is needed to approve the Excess Share Proposal. The Taubman family purports to
control 33.6% of the voting power of the Company's voting securities, primarily
through its ownership of Series B Preferred Stock, giving them an effective veto
over any potential takeover. SPG, as well as other shareholders of the Company,
have commenced litigation regarding the legality of the voting rights of the
Series B Preferred Stock and the New 3% Shares (as defined below) held or
controlled by the Taubman family and the ability of the Taubman family to vote
these shares so as to prevent the Company's common shareholders from receiving
$18.00 per Share in cash pursuant to the Offer.
SPG BELIEVES THAT THE COMPANY BOARD (OR A COMMITTEE OF ITS DIRECTORS
INDEPENDENT OF THE HOLDERS OF THE SERIES B PREFERRED STOCK) AND THE TAUBMAN
FAMILY, EACH AS FIDUCIARIES FOR THE COMMON SHAREHOLDERS, COULD AND SHOULD TAKE
ALL NECESSARY ACTIONS TO REMOVE IMPEDIMENTS TO THE CONSUMMATION OF THE OFFER.
A Tender Offer Statement on Schedule TO (which includes the Offer to
Purchase) relating to the Offer was filed by SPG with the Commission on December
5, 2002. Such documents and any amendments or supplements thereto may be
obtained from the Commission, upon payment of the Commission's customary
charges, by writing to the Commission's principal office at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549. Such materials also are available for
inspection and copying at the principal office of the Commission at the address
set forth immediately above, and at the Commission's regional office at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. This
information also is available without charge on the Commission's website at
www.sec.gov.
Shares are only being sought for tender by means of and pursuant to the
terms of the Offer to Purchase and related Letter of Transmittal, as filed by
SPG with the Commission as exhibits to the Purchaser's Tender Offer Statement on
Schedule TO on December 5, 2002.
IF YOU BELIEVE THAT YOU (AND NOT THE TAUBMAN FAMILY) SHOULD HAVE THE
OPPORTUNITY TO DECIDE THE FUTURE OF YOUR COMPANY AND THAT YOU SHOULD HAVE THE
OPPORTUNITY TO RECEIVE $18.00 PER SHARE IN CASH FOR ALL OF YOUR SHARES, SPG
URGES YOU TO COMPLETE, SIGN AND RETURN YOUR GREEN AGENT DESIGNATION PROMPTLY.
CALLING THE SPECIAL MEETING IS AN IMPORTANT STEP IN FACILITATING THE
CONSUMMATION OF THE OFFER. SIGNING AN AGENT DESIGNATION WILL NOT AFFECT YOUR
ABILITY TO VOTE FOR OR AGAINST ANY PROPOSAL PRESENTED AT THE SPECIAL MEETING.
SIGNING AND RETURNING AN AGENT DESIGNATION CARD WILL NOT CONSTITUTE A
TENDER OF YOUR SHARES PURSUANT TO THE OFFER OR OBLIGATE YOU TO TENDER YOUR
SHARES PURSUANT TO THE OFFER. YOU MUST SEPARATELY TENDER YOUR SHARES PURSUANT TO
THE OFFER TO PURCHASE
3
AND THE RELATED LETTER OF TRANSMITTAL IF YOU WISH TO PARTICIPATE IN THE OFFER.
THE TENDER OFFER AND ACCOMPANYING LITIGATION
On December 5, 2002, the Purchaser commenced a tender offer to purchase
all the outstanding Shares of the Company at a price of $18.00 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in an Offer to Purchase dated December 5, 2002 and in the
related Letter of Transmittal.
The purpose of the Offer is for SPG Inc. to acquire control of, and
ultimately all the Common Stock of, the Company. If the Offer is consummated,
SPG Inc. currently intends, as soon as practicable following the consummation of
the Offer, to propose and seek to have the Company consummate a merger or
similar business combination (the "Proposed Merger") with the Purchaser or
another subsidiary of SPG Inc., pursuant to which each then outstanding Share
(other than Shares held by the Purchaser, SPG Inc. or its other subsidiaries)
would be converted into the right to receive an amount in cash per Share equal
to the highest price per Share paid by the Purchaser pursuant to the Offer,
without interest. Consummation of the Offer is subject to the terms and
conditions described in the Offer to Purchase and the related Letter of
Transmittal, copies of which are available upon request from SPG Inc.'s and the
Purchaser's Information Agent, MacKenzie Partners, Inc. ("MacKenzie Partners"),
at the telephone numbers and address listed above. The Offer is not being made
for shares of Series A Cumulative Redeemable Preferred Stock, $.01 par value, of
the Company (the "Series A Preferred Stock") or the Series B Preferred Stock.
Each outstanding share of Series A Preferred Stock and Series B Preferred Stock
would remain outstanding following consummation of the Proposed Merger.
The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn on or prior to the expiration of the Offer
such number of Shares that represents, together with Shares owned by the
Purchaser, SPG Inc. or any of its other subsidiaries, at least two-thirds (2/3)
of the total voting power (as described in the Offer to Purchase) of the Company
(the "Minimum Tender Condition"), (ii) the Purchaser being satisfied, in its
sole discretion, that after consummation of the Offer none of the Shares
acquired by the Purchaser shall be deemed "Excess Stock" (as defined in the
Company's Charter (the "Excess Share Condition")), (iii) full voting rights for
all Shares to be acquired by the Purchaser pursuant to the Offer having been
approved by the shareholders of the Company pursuant to the Michigan Control
Share Act or the Purchaser being satisfied, in its sole discretion, that the
provisions of such statute are invalid or otherwise inapplicable to the Shares
to be acquired by the Purchaser pursuant to the Offer (the "Control Share
Condition") and (iv) the Purchaser being satisfied, in its sole discretion,
that, after consummation of the Offer, the Michigan Business Combination Act
will not prohibit for any period of time, or impose any shareholder approval
requirement with respect to, the Proposed Merger or any other business
combination involving the Company and the Purchaser or any other affiliate of
SPG Inc. (the "Business Combination Condition").
The Control Share Condition has been satisfied, as of the date hereof,
through the amendment of the Company's by-laws (as amended, the "By-Laws") on
December 10, 2002 to provide that the Michigan Control Share Act does not apply
to the Company. Notwithstanding the foregoing, SPG believes there is a
possibility that the Company could,
4
through a further amendment to its By-Laws, opt in to the Michigan Control Share
Act. If the Company, through a further amendment to its By-Laws or otherwise,
again becomes subject to the requirements of the Michigan Control Share Act, the
Control Share Condition will need to be satisfied again, and continue to be
satisfied, before the Offer can be consummated. According to the Company
Schedule 14D-9, the Company currently is not subject to the Michigan Business
Combination Act. Accordingly, the Business Combination Condition has been
satisfied, as of the date hereof, unless the Company Board opts into the
Michigan Business Combination Act. The Offer is also subject to other terms and
conditions described in the Offer to Purchase and the related Letter of
Transmittal. The Offer is not conditioned on the Purchaser obtaining financing.
The Offer is scheduled to expire at 12:00 midnight, New York City time on
January 17, 2003, unless the Offer is extended.
On December 11, 2002, the Company filed the Company Schedule 14D-9 with
the Commission recommending that the Company's common shareholders reject the
Offer. The recommendation was made despite the fact that the Offer Price
represents a 35% premium over the $13.32 closing price of the Common Stock on
October 15, 2002 (the last trading day prior to SPG Inc.'s initial private
communication to the Company expressing its interest in pursuing a business
combination). SPG does not believe that the recommendation is in the best
interests of the Company's common shareholders because SPG believes the
Company's common shareholders should be given the opportunity to decide for
themselves whether to tender their Shares and receive $18.00 in cash per Share
in the Offer.
The Company Board publicly rejected an earlier offer by SPG Inc. to
acquire all of the Shares for $17.50 per Share, stating that any discussions
regarding a transaction would not be productive because the Taubman family (with
its purported over 30% voting stake) had informed the Company Board that it is
categorically opposed to the sale of the Company.
SPG BELIEVES THAT THE COMPANY BOARD, ACTING AS FIDUCIARIES FOR THE COMMON
SHAREHOLDERS, COULD AND SHOULD ENTER INTO NEGOTIATIONS WITH SPG INC. RELATING TO
A BUSINESS COMBINATION IN ORDER TO ALLOW THE HOLDERS OF SHARES THE OPPORTUNITY
TO RECEIVE THE OFFER PRICE. SPG BELIEVES THAT THE TAUBMAN FAMILY ALSO HAS
FIDUCIARY DUTIES TO THE COMMON SHAREHOLDERS OF THE COMPANY TO TAKE STEPS TO
REMOVE THE IMPEDIMENTS TO THE CONSUMMATION OF THE OFFER.
While SPG would prefer that the Company Board and the Taubman family take
actions to facilitate the Offer, SPG has also begun to take its own steps to
attempt to remove the impediments to the consummation of the Offer. On December
5, 2002, SPG filed the Complaint against the Company, the Company Board and
certain members of the Taubman family. Among other things, the Complaint seeks
to invalidate the veto power over the Offer that the Taubman family purports to
wield, and upon which the Company Board is implicitly relying. SPG also asserts
in the Complaint that the defendants are violating Michigan law by engaging in
conduct that is designed to impede the Offer and injure shareholders.
The Complaint challenges a series of tactical corporate mechanisms that
purportedly give the Taubman family a blocking voting position against the
Offer, including: (i) the Excess Share Provision (as defined below), which is
unalterable and unwaivable by the Company Board absent amendment of the Charter
by a two-thirds (2/3) shareholder vote, (ii) the Company Board
5
providing to the Taubman family, for nominal consideration, in violation of its
fiduciary duties and without adequate disclosure or shareholder approval as
required by Michigan law, Series B Preferred Stock that purported to increase
the Taubman family's voting power from less than 1% to over 30%, and (iii) the
Taubman family's recent acquisition of an additional 3% of the voting power (the
"New 3% Shares") by the exercise of options by members of the Taubman family and
the grant of irrevocable proxies by several close associates of the Taubman
family.
Through the Complaint, SPG seeks, among other things, (i) a declaration
that the Series B Preferred Stock and the New 3% Shares held or controlled by
the Taubman family do not have any voting rights, (ii) a preliminary and
permanent injunction preventing the Taubman family from voting its Series B
Preferred Stock and the New 3% Shares, and (iii) a declaration that both the
Company Board and the Taubman family have breached, and continue to breach,
their fiduciary duties to the Company's common shareholders. SPG believes that
the Taubman family, which holds an approximately 1% economic stake in the
Company, should not be permitted to use the Series B Preferred Stock and the New
3% Shares to veto the Offer and deny the holders of the Common Stock the ability
to receive a premium for their Shares.
In addition, certain other shareholders of the Company have commenced
lawsuits against the Company and certain members of the Company Board relating
to the Series B Preferred Stock. On November 14 and November 15, 2002, two
actions, styled as class actions commenced on behalf of the Company's
shareholders, were filed in the Circuit Court for the County of Oakland, State
of Michigan, against the Company and members of the Company Board. The actions
are captioned JOSEPH LEONE V. TAUBMAN CENTERS, INC., ET AL., 02-045425-CZ (filed
Nov. 15, 2002) (the "LEONE" action); and LIONEL Z. GLANCY V. ROBERT TAUBMAN ET
AL., 02-045409-CK (filed Nov. 14, 2002, and as amended in an amended complaint
filed December 6, 2002)) (the "GLANCY" action). On November 19, 2002, a third
class action captioned JUDITH B. SCHIFFMAN REVOCABLE LIVING TRUST V. TAUBMAN
CENTERS, INC., ET AL., 02-045904-CB (filed November 19, 2002) was filed in the
same court (the "SCHIFFMAN" action).
In the LEONE action, the complaint alleges that the Company and certain
members of the Company Board have breached their fiduciary duties by, among
other things, thwarting SPG Inc.'s offer to buy all outstanding Common Stock of
the Company and through the issuance of Series B Preferred Stock to the Taubman
family in a transaction without proper disclosure or a shareholder vote. Among
other things, the LEONE action seeks as relief an order declaring that the
issuance of the Series B Preferred Stock was unauthorized and that the Taubman
family's voting power in the Company is illegal.
In the GLANCY action , the complaint alleges that the defendants are,
among other things, (i) breaching their fiduciary duties by failing to take any
action to inform themselves about the "generous offer made by Simon Property
Group," (ii) abusing their fiduciary positions, and (iii) seeking to entrench
themselves in the management of the Company. The GLANCY action also asserts
derivative claims and claims under the Michigan Control Share Act, and seeks as
relief, among other things, an order enjoining defendants from taking any action
that will entrench them to the detriment of maximizing value for the public
shareholders.
The SCHIFFMAN action contains substantially similar allegations and seeks
substantially similar relief as the LEONE action.
6
On December 5, 2002, plaintiff Joseph Leone, on behalf of himself and all
others similarly situated, filed a federal class action and derivative complaint
against the Company and the Company Board captioned JOSEPH LEONE V. ROBERT S.
TAUBMAN, ET AL., (02-74828) in the United States District Court for the Eastern
District of Michigan (the "LEONE federal action"). The Leone federal action
asserts claims against the Company Board for breach of fiduciary duty based on
allegations substantially similar to those in the Leone action, and asserts a
claim that the Michigan Control Share Act and the Michigan Business Combination
Act are unconstitutional and null and void under the Commerce, Supremacy and Due
Process Clauses of the United States Constitution.
SPG is seeking to negotiate with the Company with respect to the
combination of the Company with the Purchaser or another affiliate of SPG Inc.
SPG is willing to allow the holders of interests in Taubman L.P., including the
Taubman family, to retain their economic interest in Taubman L.P., or at such
holders' option, to participate in a transaction whereby such holders would
receive either the Offer Price or an equivalent value for such holders' limited
partnership interests by exchanging such interests on a tax efficient basis for
SPG L.P. limited partnership interests. The Purchaser reserves the right to
amend the Offer (including amending the number of Shares to be purchased and the
Offer Price) upon entering into a merger agreement with the Company, or to
negotiate a merger agreement with the Company not involving a tender offer
pursuant to which the Purchaser would terminate the Offer and the Shares would,
upon consummation of such merger, be converted into cash, Common Stock of SPG
Inc., and/or other securities in such amounts as are negotiated by SPG Inc., the
Purchaser and the Company.
BACKGROUND OF THE TENDER OFFER
On October 16, 2002, David Simon, Chief Executive Officer of SPG Inc.,
called Robert S. Taubman, Chairman of the Company Board and President and Chief
Executive Officer of the Company, to express SPG Inc.'s interest in pursuing a
business combination between SPG Inc. and the Company. Later that day, Mr. Simon
sent a letter to Mr. Taubman containing a written proposal describing SPG Inc.'s
interest in a business combination with the Company:
October 16, 2002
Robert S. Taubman
Chairman of the Board, President
and Chief Executive Officer
Taubman Centers, Inc.
200 East Long Lake Road, Suite 300
Bloomfield Hills, Michigan 48303
Dear Bob:
As you know from our conversations over the last few years, I have
long admired Taubman Centers, Inc. and the wonderful portfolio of
properties built by you and your family. I would like to discuss with you
Simon Property Group's proposal to acquire immediately all of the
publicly traded stock of Taubman Centers, Inc. for cash consideration
that represents an attractive premium to your common shareholders. In
addition, if your limited partners decide to participate, we will make an
equally attractive offer to combine their holdings into Simon's operating
partnership on a basis that affords both tax efficiencies and liquidity.
7
We believe that a business combination of Simon and Taubman is
compelling, and most importantly, will produce substantial and immediate
value for your shareholders. In addition, your limited partners will have
the opportunity to convert their holdings to units in the Simon operating
partnership on the same economic basis or choose to remain limited
partners in the Taubman partnership. It is my personal hope that you,
your family and Taubman's board will share our enthusiasm for a
combination of our companies and that we can move forward quickly.
Because of the importance of this matter, I would like to present
this proposal to you in person as soon as possible. At our meeting, I
will be prepared to discuss price and other specific components of our
proposal, and address any questions you may have about the transaction. I
will contact you shortly to arrange a meeting.
Sincerely,
/s/ David Simon
On October 21, 2002, Mr. Taubman returned Mr. Simon's phone call from
earlier that day and indicated that he had no interest in having any discussions
or meetings regarding SPG Inc.'s proposed business combination.
On October 22, 2002, SPG Inc. sent the following letter to Mr. Taubman:
October 22, 2002
Robert S. Taubman
Chairman of the Board, President
and Chief Executive Officer
Taubman Centers, Inc.
200 East Long Lake Road, Suite 300
Bloomfield Hills, Michigan 48303
Dear Bob:
I am genuinely disappointed by your response to my October 16,
2002 letter, your refusal to meet with me, and your decision to reject
out-of-hand our proposal to buy the public shares of Taubman Centers,
Inc. (the "Company") at a very significant premium to their current
market price. At a minimum, I thought you would want to meet with me to
discuss the specifics of our proposal. Given the current state of the
financial markets and considering Simon's financial wherewithal and our
demonstrated ability to close deals and add value, our proposal
represents a financial opportunity for your shareholders that merits
careful consideration.
Although I very much wanted to describe our proposal to you in
person, I am instead setting out its basic terms in this letter, so that
you and your board can review it carefully. We are prepared to pay $17.50
for each share of Company common stock in cash. We are also willing to
provide equivalent value to the holders of all outstanding limited
partnership interests in The Taubman Realty Group Limited Partnership
(the "Operating Partnership") and allow them to exchange those interests
for limited partnership units in Simon's operating partnership on a tax
efficient basis or, at their option, remain limited partners in your
Operating Partnership.
Specifically, Simon would acquire all of the Company's outstanding
publicly held common stock pursuant to a merger agreement. The individual
steps to accomplish this merger would be as follows:
1. Simon (or its affiliate) would make a tender offer to
purchase all of Taubman's common stock for $17.50 per share, net
to each seller in cash.
8
2. As promptly as practicable after consummation of the
tender offer, an affiliate of Simon would merge with the Company,
and each non-tendering share of Company common stock would be
converted into the right to receive $17.50 per share in cash.
We are also prepared to purchase, either for cash or through an
exchange of partnership interests, all limited partnership interests in
the Operating Partnership, which would include the acquisition of the
Company's Series B preferred stock. However, if your family and the other
limited partners would prefer to remain limited partners in the Operating
Partnership, we are prepared to accommodate that desire while at the same
time making our proposal available to holders of the Company's publicly
held common stock.
Our $17.50 per share all cash offer represents a price never
before realized in the Company's ten year trading history and affords
your shareholders a 30% premium to today's closing price, as well as a
premium to Wall Street's consensus net asset value for the Company. This
proposal is NOT subject to the receipt of financing or any due diligence
investigation of the Company and its subsidiaries or any requirement that
the limited partners exchange their interests.
We are well aware that the Company's charter contains an "excess
share provision" that prohibits the purchase of more than 8.23% of the
aggregate value of the Company's stock and that the board of directors
can only waive application of this provision to permit a purchase of up
to 9.9% of aggregate value. This provision, ostensibly for the purpose of
preserving the Company's status as a REIT, goes well beyond what is
necessary for that purpose and stands between the Company's shareholders
and their ability to realize a substantial premium for their shares. Our
proposal, therefore, must be conditioned on the inapplicability of the
Company's excess share provision to our bid. In this regard, we note that
Simon's acquisition of Company securities need NOT jeopardize the
Company's status as a REIT, and we therefore believe that the Company's
board of directors, as fiduciaries, must take steps to amend the
Company's charter to allow our proposal to go forward for the benefit of
the Company's common shareholders. We also believe it is the
responsibility of the holders of the Series B Preferred Stock to approve
such an amendment so as not to impede the ability of the Company's common
shareholders to receive a significant premium, particularly given the
fact that our proposal allows the limited partners of the Operating
Partnership the option to either convert their holdings on a tax
efficient basis or remain in their existing structure.
While this letter outlines the basic terms of our proposal, we are
ready to work diligently with you and your team to finalize all other
terms of the deal.
Bob, I know this is a difficult subject for you personally, but
our proposal, which is intended to bring immediate and substantial value
to the Company's shareholders, warrants your serious and immediate
attention. I am confident that given the opportunity to meet with you, we
could finalize a mutually beneficial transaction between our two great
companies.
I will call you in the next few days, giving you sufficient time
to review this letter, so that we can agree on a time and place for a
meeting.
Sincerely,
/s/ David Simon
On October 25, 2002, Mr. Simon placed a call to Mr. Taubman's office and
left word requesting that Mr. Taubman return the call. On the evening of October
28, 2002, Mr. Taubman called Mr. Simon at his residence and read to Mr. Simon
the following letter which Mr. Taubman then sent to Mr. Simon:
October 28, 2002
David Simon
9
Chief Executive Officer
Simon Property Group
115 West Washington Street
Indianapolis, Indiana 46204
Dear David,
This will respond to your letter dated October 22, 2002. The Board
of Directors of Taubman Centers has met and with the advice of its
outside financial and legal advisors, has considered your unsolicited
proposal. The Board is unanimous in concluding that the company has no
interest whatsoever in pursuing a sale transaction, and that discussion
as to such a transaction would not be productive.
Sincerely,
/s/ Robert S. Taubman
Chairman, President and Chief Executive Officer
After reading the letter, Mr. Taubman stated he would resist any attempt
by SPG Inc. to acquire the Company.
On November 1, 2002, Mr. Simon's office called Mr. Taubman's office
requesting a meeting with Mr. Taubman during the NAREIT national conference.
On November 5, 2002, in response to Mr. Simon's request of November 1,
2002, Mr. Taubman conveyed in a telephone conversation with Mr. Simon that he
would be willing to meet with Mr. Simon as long as there would be no discussion
about the contents of Mr. Simon's recent letters to Mr. Taubman.
On November 6, 2002, at the NAREIT national conference Mr. Simon offered
to provide Mr. Taubman further details regarding SPG Inc.'s offer to acquire the
Company and reinforced SPG Inc.'s willingness to accommodate the needs of the
Taubman family. Mr. Taubman refused to engage in any discussion about a possible
sale of the Company to SPG Inc.
On November 13, 2002, SPG Inc. delivered a letter to the Company Board
setting forth the terms of its proposed business combination with the Company,
and calling on the Company Board for assistance in surmounting the obstacles
presented by the Company's corporate governance structure to such a business
combination. This letter also was publicly disclosed by means of the following
press release:
INDIANAPOLIS, Nov. 13 -- Simon Property Group, Inc. (NYSE: SPG) today
made a written offer to acquire Taubman Centers, Inc. (NYSE: TCO) for $17.50 per
share in cash, a substantial current premium and a price higher than Taubman
Centers shares have ever traded. The letter sent today to the Board of Directors
of Taubman Centers by David Simon, Chief Executive Officer of Simon Property
Group, follows:
Dear Members of the Board of Directors:
As you may know, we recently made a written offer to Robert S. Taubman to
pay $17.50 in cash for each share of Taubman Centers, Inc. (the
"Company") common stock. Our all-cash offer would deliver to all Taubman
shareholders a substantial premium--approximately 18% above yesterday's
closing price and 30% above the price on the day we initially made our
offer--and it exceeds the highest price at which Taubman shares have ever
traded. Our offer represents a compelling strategic and financial
transaction that
10
would produce substantial and immediate value for all of your
shareholders. We can move quickly since our offer is not subject to the
receipt of financing or any due diligence investigation of the Company.
On several occasions, we have communicated our offer to Mr. Taubman and
suggested that we have an opportunity to discuss it with the members of
Taubman's board of directors. We wrote Mr. Taubman on October 16, 2002,
to request a meeting to present our offer. He refused to meet. On October
22, 2002, we again wrote Mr. Taubman, this time setting forth the basic
terms of our offer. Once again, he refused even to have a discussion,
writing to us on October 28, 2002, that "the Company has no interest
whatsoever in pursuing a sale transaction..."
We are dismayed that Mr. Taubman continues in his refusal even to discuss
our offer--or indeed any sale transaction, particularly in light of the
fact that we have expressed a willingness to be very flexible with
respect to the structure of the proposed transaction. The offer is not
conditioned upon any participation by the Taubman family. Instead we have
agreed to accommodate any desire by the Taubman family to retain its
economic interest in the Taubman Realty Group Limited Partnership, or, at
their option, to participate in the transaction, and receive either cash
or equivalent value for their existing partnership interests by
exchanging them on a tax efficient basis for partnership interests in the
Simon operating partnership.
Since the Taubman family can choose to (1) retain its current Taubman
partnership units, (2) convert into Simon partnership units, or (3) sell
for cash, we can only conclude that Mr. Taubman's refusal even to discuss
our offer reflects the Taubman family's desire not to permit the Company
to be sold under any circumstances. While it is entirely appropriate for
the Taubman family to retain the right to choose between various options
with respect to the treatment of its own partnership units, it is
improper for these insiders to prevent public shareholders from choosing
to receive a premium for their shares.
Mr. Taubman apparently believes the Taubman family is not accountable to
the public shareholders because of the family's claimed blocking
position--via the Series B preferred stock--which was surreptitiously
issued in a "restructuring" transaction many years after the Company's
initial public offering without either proper disclosure or a shareholder
vote. We question both the propriety and validity of a transaction which
attempts to transfer to the Taubman family control and a permanent veto
over material decisions that rightfully belong to the public shareholders
of Taubman--such as an all- cash, premium offer to acquire the Company.
The effect of the Series B preferred stock, for which the Taubman family
paid a total of only $38,400.00, is to disenfranchise the public
shareholders. This entrenchment device is a permanent corporate
governance defect embedded in the Company's structure--and it continues
to hurt the public shareholders. Indeed, between the time the Series B
shares were issued to the Taubman family in 1998 and our October 22 offer
letter, the price of Taubman common shares has fallen by 4%.
We understand that the obstacles created in the governance structure by
the Taubman family, at the expense of the public shareholders, are
significant. However, with the cooperation of the Board of Directors,
acting as fiduciaries for the common shareholders, we believe these
obstacles are surmountable. We also trust that undisclosed economic or
governance burdens have not been, and will not be, imposed on Taubman in
response to our offer or otherwise.
We hope the Board will agree with us that our offer provides an excellent
opportunity for Taubman shareholders to realize immediate liquidity and
full value for their shares to an extent not likely to be available to
them in the marketplace or in any alternative transaction. At a time when
good corporate governance is particularly important to investors, we seek
your help in restoring the rights of the public shareholders of Taubman.
We prefer to complete this acquisition through a negotiated transaction.
We stand ready to make a detailed presentation of our offer to the Board
and to answer any questions you may have.
11
Very truly yours,
David Simon
Chief Executive Officer
Within one hour of SPG Inc.'s November 13, 2002 press release, the
Company categorically rejected SPG Inc.'s proposal pursuant to the following
press release:
Bloomfield Hills, Michigan, November 13, 2002 - Taubman Centers, Inc.
(NYSE: TCO) confirmed today that it has received an unsolicited proposal
from Simon Property Group, Inc. (NYSE: SPG) seeking to acquire control of
the Company. Taubman Centers said that its Board of Directors had
previously met and, with the advice of its outside financial and legal
advisors, had considered the proposal. The Board unanimously concluded
that Taubman Centers has no interest in pursuing a sale transaction and
that discussions regarding such a transaction would not be productive.
The Taubman family, large economic stakeholders with voting control of
more than 30% of Taubman Centers, has also confirmed that it has no
interest in pursuing a sale of the Company. A sale or other extraordinary
transaction would require a 2/3rds affirmative vote.
The Company stated, "The Taubman Centers Board of Directors has
unanimously rejected this proposal. In addition, the Taubman family has
informed the Board that is categorically opposed to the sale of the
Company. Given the family's position, any efforts to purchase Taubman
Centers would not be productive." Goldman, Sachs & Co. is acting as
financial advisor and the law firm of Wachtell, Lipton, Rosen & Katz is
acting as legal advisor.
On December 5, 2002, the Purchaser commenced the Offer and filed a
Preliminary Proxy Statement with the Commission for a potential shareholder
meeting under the Michigan Control Share Act to allow the Company's shareholders
to approve voting rights for the Shares that the Purchaser is seeking to
purchase in the Offer.
On December 5, 2002, SPG filed the Complaint in the United States
District Court for the Eastern District of Michigan against the Company, the
Company Board and certain members of the Taubman family.
On December 10, 2002, the Company Board amended the By-Laws to opt-out of
the Michigan Control Share Act and to make certain other procedural changes
including requiring advance notice for shareholder nominations and proposals.
SPG believes that the Company opted out of the Michigan Control Share Act in
order to avoid a shareholder referendum on the Offer.
On December 11, 2002, the Company filed the Company Schedule 14D-9.
THE SPECIAL MEETING
GENERAL
SPG is furnishing this Solicitation Statement (this "Solicitation
Statement") and a form of Agent Designation to the holders of outstanding shares
of Common Stock and Series B Preferred Stock for the appointment of designated
agents of the shareholders to call the Special Meeting. For the Special Meeting
to be called and held pursuant to the By-Laws, Agent Designations in favor of
calling the Special Meeting must be executed by and received from the record
holder or holders of not less than 25% of all of the shares entitled to vote at
such meeting
12
(the "Requisite Holders"). Alternatively, if Agent Designations in favor of
calling the Special Meeting are executed by and received from the record holder
or holders of not less than 10% of all of the shares of capital stock entitled
to vote at such meeting, application may be made, pursuant to Section 403 of the
MBCA to the circuit court of Oakland County, Michigan (the county in which the
Company's principal office is located), to order, for good cause shown, that the
Special Meeting be called and held.
By signing an Agent Designation you will designate specified persons as
your agents and will authorize those persons to call the Special Meeting, to be
held at a time and place to be determined, within approximately ___ days
following the date on which SPG receives Agent Designations from the Requisite
Holders or the date on which the circuit court of Oakland County, Michigan
orders that the Special Meeting be called and held. After the Special Meeting
has been called, SPG will solicit proxies from you in support of the Proposals
by sending you a notice of the Special Meeting, a proxy statement and a proxy
card for use therewith.
THE PROPOSALS
If SPG is successful in its solicitation of Agent Designations from the
Requisite Holders or if Agent Designations in favor of calling the Special
Meeting are executed by and received from the record holder or holders of not
less than 10% of all of the shares entitled to vote at such meeting and the
circuit court in Oakland County, Michigan orders that the Special Meeting be
called and held, SPG expects to present the following matters for a shareholder
vote, in the following order, at the Special Meeting. The purpose of the
Proposals is to facilitate the consummation of the Offer. The Proposals are:
Excess Share Proposal. SPG expects to introduce a proposal to amend the
provisions of Article III, Section 2, Subsection (d) of the Charter (the "Excess
Share Provision") to provide that the purchase by the Purchaser of all of the
Shares tendered pursuant to the Offer would not trigger the Excess Share
Provision. Consummation of the Offer is conditioned upon the Purchaser being
satisfied, in its sole discretion, that the Excess Share Provision has been
amended or waived in such manner that will permit the Purchaser to purchase all
of the Shares tendered pursuant to the Offer without triggering the Excess Share
Provision (the "Excess Share Condition").
The Excess Share Provision prohibits any person or entity, subject to
certain specified exceptions, from owning greater than 8.23% of the total
aggregate value (calculated according to the most recent closing price of the
Shares on the New York Stock Exchange (the "NYSE") or, if unavailable, by the
Company Board in its good faith determination) of the outstanding capital stock
(the "Ownership Limit"), which includes all outstanding Common Stock and
preferred stock of the Company; provided, however, that "look-through entities"
may receive an exception granted by the Company Board to increase their
Ownership Limit up to 9.9%. Any transfer that would result in any person owning
in excess of the Ownership Limit of the aggregate value of the outstanding
Common Stock and preferred stock of the Company, is void from the moment of
attempted transfer as to the shares of Common Stock and/or preferred stock of
the Company that are in excess of the Ownership Limit, and the intended
transferee acquires no rights, including voting rights, in such shares. The
Company is required to demand transfer of any stock transferred in excess of the
Ownership Limit ("Excess Stock") to a designated agent, acting for
13
the benefit of a charitable organization chosen by the Company Board, who will
then sell the Excess Stock in an arm's length transaction, and who will also
have the exclusive right to vote the stock prior to sale.
For a company to qualify as a real estate investment trust, or REIT,
under the Internal Revenue Code of 1986, as amended (the "Code"), not more than
50% of the value of the issued and outstanding stock of the company may be
owned, directly, or indirectly, by five or fewer individuals (as defined in the
Code) during the last half of a taxable year other than the first year of the
company's qualification as a REIT. Consummation of the Offer would not
jeopardize the Company's status as a REIT because neither SPG Inc. nor the
Purchaser would be deemed an individual (as defined in the Code) for purposes of
the restriction on concentration of ownership of REITs as described above.
The Company's Excess Share Provision cannot be waived by the Company
Board, absent a Charter amendment, to allow any person to own more than 9.9% of
the aggregate value of the Company's outstanding capital stock, subject to
certain specified exceptions. Article III, Section 2, Subsection (b) of the
Charter provides that actions to be taken by the shareholders of the Company
generally require the affirmative vote of the holders of two-thirds (2/3) of the
outstanding shares of capital stock of the Company entitled to vote thereon
("Two-Thirds Shareholder Approval"). Two-Thirds Shareholder Approval is required
in order to amend the Excess Share Provision in order to permit the Excess Share
Condition to be satisfied.
The Taubman family purports to control 33.6% of the voting power of the
Company's voting securities, primarily through its ownership of Series B
Preferred Stock, giving them an effective veto over any potential takeover. SPG,
as well as other shareholders of the Company, have commenced litigation
regarding the legality of the voting rights of the Series B Preferred Stock and
the New 3% Shares held or controlled by the Taubman family and the ability of
the Taubman family to vote these shares in order to prevent the Taubman family
from using its shares to impede an amendment to the Charter which would satisfy
the Excess Share Condition.
Business Combination Proposal. According to the Company Schedule 14D-9,
the requirements of the Michigan Business Combination Act do not currently apply
to the Company. However, SPG expects to introduce a proposal urging the Company
Board to pass a resolution approving the Offer in order to satisfy the Business
Combination Condition (as defined below) in case the Company opts into the
provision in the future through an action of the Company Board.
It is a condition to the consummation of the Offer that the Purchaser be
satisfied, in its sole discretion, that the Michigan Business Combination Act
will not prohibit for any period of time, or impose any shareholder approval
with respect to, the Proposed Merger or any other "Business Combination" (as
defined in the Michigan Business Combination Act) involving the Company and the
Purchaser or any other affiliate of SPG Inc. (the "Business Combination
Condition").
In general, the Michigan Business Combination Act prohibits Michigan
corporations, such as the Company, from engaging in a "Business Combination"
(which is defined to include a variety of transactions, including mergers) with
an "interested shareholder" (as defined below)
14
for a period of five years following the date the person became such an
"interested shareholder," unless (1) the board of directors of the corporation
adopts resolutions approving the Business Combination prior to consummation of
the Business Combination and prior to the other party to the transaction or its
affiliates otherwise becoming "interested shareholders" or (2) each of the
following conditions is met:
(i) an advisory statement is given by the board of directors;
(ii) the combination is approved by a vote of at least 90% of each
class of the voting stock of the company entitled to vote; and
(iii) the combination is approved by a vote of at least two-thirds (2/3)
of each class of the voting stock of the company entitled to vote,
excluding the voting shares owned by the "interested shareholder."
An "interested shareholder" is generally defined to mean any person that:
(a) is the beneficial owner of 10% or more of the outstanding voting stock of
such corporation, or (b) is an affiliate of such corporation and was the
beneficial owner of 10% or more of the outstanding voting stock of the
corporation at any time within two years immediately prior to the relevant date.
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS
SPG expects to request, in the proxy solicitation relating to the Special
Meeting, authority (i) to initiate and vote for proposals to recess or adjourn
the Special Meeting for any reason, including to allow inspectors of the
election to certify the outcome of the Proposals, or to allow the solicitation
of additional votes, if necessary, to approve any of the Proposals and (ii) to
oppose and vote against any proposal to recess or adjourn the Special Meeting
for any reason. SPG does not currently anticipate additional proposals on any
substantive matters. Nevertheless, SPG reserves the right either to modify the
Proposals or to cause additional proposals to be identified in the notice of,
and in the proxy materials for, the Special Meeting. SPG is not aware of any
other proposals to be brought before the Special Meeting. However, should other
proposals be brought before the Special Meeting, SPG will vote its proxies on
such matters in their discretion.
This Solicitation Statement is not being delivered pursuant to the
provisions of the Michigan Control Share Act, and shall not, and is not intended
to, be construed as an acquiring person statement or a request for a control
share special meeting. The Company's By-Laws provide that the Michigan Control
Share Act does not apply to the Company.
IF THE SPECIAL MEETING IS CALLED, YOU WILL BE FURNISHED WITH NOTICE OF
THE SPECIAL MEETING AND PROXY MATERIALS RELATING TO THE FOREGOING PROPOSALS.
THESE PROXY MATERIALS WILL CONTAIN SIGNIFICANTLY MORE DETAILED INFORMATION
CONCERNING THE PROPOSALS AND THE PROPOSED ACQUISITION, INCLUDING RELEVANT PRO
FORMA FINANCIAL INFORMATION.
15
IF SPG DOES NOT OBTAIN SUFFICIENT AGENT DESIGNATIONS TO CALL THE SPECIAL
MEETING AND IF THE PROPOSALS ARE NOT APPROVED BY THE COMPANY'S SHAREHOLDERS AT
THE SPECIAL MEETING, IT IS UNLIKELY THAT CERTAIN CONDITIONS TO THE OFFER WILL BE
SATISFIED AND THAT SHARES OF COMMON STOCK WILL BE ACCEPTED FOR PAYMENT PURSUANT
TO THE OFFER. IN SUCH EVENT, SPG MAY EITHER (1) TERMINATE THE OFFER OR (2)
CONTINUE TO PURSUE THE OFFER AND THE SATISFACTION OF THE CONDITIONS TO THE OFFER
THROUGH NEGOTIATION, LITIGATION AND OTHER MEANS.
AGENT DESIGNATION PROCEDURES
Pursuant to this Solicitation Statement, SPG is soliciting Agent
Designations from the holders of outstanding shares of Common Stock and Series B
Preferred Stock to call the Special Meeting. By executing an Agent Designation,
a shareholder will designate specified persons as the shareholder's agents
(each, a "Designated Agent") and will authorize the Designated Agents (i) to
call the Special Meeting, (ii) to set the date and time of the Special Meeting,
(iii) to give notice of the Special Meeting and any adjournment thereof, (iv) to
exercise all rights of Requisite Holders incidental to calling and convening the
Special Meeting and causing the purposes of the authority expressly granted
pursuant to the Agent Designations to the Designated Agents to be carried into
effect, and (v) to apply, if need be, to the circuit court in Oakland County,
Michigan (the county in which the Company's principal office is located) to
order, for good cause shown, that the Special Meeting be called and held. Agent
Designations do not grant the Designated Agents the power to vote any Shares at
the Special Meeting. To vote on the matters to be brought before the Special
Meeting you must vote by proxy or in person at the Special Meeting.
Executed Agent Designations should be delivered, by fax or by mail (using
the enclosed envelope), to SPG's Information Agent, MacKenzie Partners for
delivery to the Company, on or before January __, 2003 or such later date as SPG
may from time to time establish. If executed Agent Designations from the
Requisite Holders are received by SPG prior to January ___, 2003, SPG may call
the Special Meeting at such time.
Pursuant to the By-Laws, record holders of not less than 25% of the
outstanding shares of the Company's capital stock entitled to vote may call the
Special Meeting. Alternatively, pursuant to Section 403 of the MBCA, record
holders of not less than 10% of the Company's capital stock entitled to vote may
apply to the circuit court of Oakland County, Michigan (the county in which the
Company's principal office is located), to order, for good cause shown, that the
Special Meeting be called and held.
Based on the Company's Form 10-Q for the quarter ending September 30,
2002 and the Company Schedule 14D-9, as of December 6, 2002 there were issued
and outstanding (i) 52,205,122 Shares, (ii) 31,767,066 shares of Series B
Preferred Stock, which shares are convertible into shares of Common Stock at a
rate of one share of Common Stock for each 14,000 shares of Series B Preferred
Stock, in specified circumstances (any resulting fractional shares will be
redeemed for cash), (iii) 7,097,979 partnership units of Taubman L.P. which have
rights of conversion into 7,097,979 shares of Common Stock of the Company, and
(iv) options to purchase 2,878,273 partnership units of Taubman L.P. Each
outstanding option is currently exercisable, and, pursuant to the Charter, each
unitholder who is issued a partnership unit of
16
Taubman L.P. (whether upon exercise of an option or otherwise) shall also
receive a share of Series B Preferred Stock for a purchase price of $.001 per
share. Each outstanding share of Common Stock and each outstanding share of
Series B Preferred Stock is entitled to one vote for each matter submitted for a
vote. However, as described above, SPG, as well as other shareholders of the
Company, have filed lawsuits challenging the legality of the voting rights of
the Taubman family's Series B Preferred Stock and of the New 3% Shares.
Based on A) 52,205,122 shares of Common Stock and 31,767,066 shares of
Series B Preferred Stock outstanding on December 6, 2002, B) SPG's ownership of
11,000 shares of Common Stock as of the date of this Solicitation Statement, and
C) assuming that the voting rights of the 25,228,882 shares of Series B
Preferred Stock owned by the Taubman family are invalidated and the voting
rights of the 885,584 shares of Common Stock and 1,555,178 shares of Series B
Preferred Stock comprising the New 3% Shares are invalidated, Agent Designations
from holders of at least (i) 14,064,636 shares of Common Stock and Series B
Preferred Stock, in the aggregate, in addition to the shares of Common Stock
owned by SPG will be required to call the Special Meeting pursuant to the
By-Laws and (ii) 5,619,255 shares of Common Stock and Series B Preferred Stock,
in the aggregate, in addition to the shares of Common Stock owned by SPG, will
be required to apply to the circuit court of Oakland County to order, for good
cause shown, that the Special Meeting be called.
Based on A) 52,205,122 shares of Common Stock and 31,767,066 shares of
Series B Preferred Stock outstanding on December 6, 2002, B) SPG's ownership of
11,000 shares of Common Stock as of the date of this Solicitation Statement, and
C) assuming that the shares of Series B Preferred Stock held by the Taubman
family and the New 3% Shares maintain their voting rights, Agent Designations
from holders of at least (i) 20,982,047 shares of Common Stock and Series B
Preferred Stock, in the aggregate, in addition to the shares of Common Stock
owned by Simon will be required to call the Special Meeting pursuant to the
By-Laws and (ii) 8,386,219 shares of Common Stock and Series B Preferred Stock,
in the aggregate, in addition to the shares of Common Stock owned by SPG, will
be required to apply to the circuit court of Oakland County to order, for good
cause shown, that the Special Meeting be called.
The shareholders, not the Company Board, have the right to fix the date
and time of the Special Meeting and give notice thereof. Therefore, following
receipt of Agent Designations from the Requisite Holders or the receipt of an
order from the circuit court ordering that the Special Meeting be called and
held, the Designated Agents will call the Special Meeting and fix the date and
time of the Special Meeting. Shortly thereafter, SPG will distribute the
appropriate notice of the Special Meeting, together with proxy materials and a
proxy card, to the holders of record of Common Stock and Series B Preferred
Stock entitled to vote at the Special Meeting.
If SPG receives executed Agent Designations from the Requisite Holders
and calls the Special Meeting in accordance with the By-Laws of the Company, or
if the circuit court of Oakland County, Michigan (the county in which the
Company's principal office is located) orders that the Special Meeting be called
and held, the Company Board shall fix the record date for determining
shareholders entitled to notice of, or to vote at, the Special Meeting, which
record date shall not be more than sixty (60) nor less than ten (10) days before
the date of the Special Meeting.
17
You may revoke your Agent Designation at any time by delivering a written
revocation to SPG in care of MacKenzie Partners at the address or fax number set
forth on the back cover of this Solicitation Statement. Such a revocation must
clearly state that your Agent Designation is no longer effective. Any revocation
of an Agent Designation will not affect any action taken by the Designated
Agents pursuant to the Agent Designation prior to such revocation.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign an Agent Designation with respect to your
shares and only upon receipt of your specific instructions. Accordingly, please
contact the person responsible for your account and give instructions for a
GREEN Agent Designation representing your shares to be signed. SPG urges you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of such instructions to SPG in care of MacKenzie Partners
at the address or fax number set forth on the back cover of this Solicitation
Statement so that SPG will be aware of all instructions given and can attempt to
ensure that such instructions are followed.
BY EXECUTING THE GREEN AGENT DESIGNATION AND RETURNING IT TO SPG, YOU ARE
NOT COMMITTING TO CAST ANY VOTE IN FAVOR OR AGAINST, NOR ARE YOU GRANTING ANY
PROXY TO VOTE ON, ANY OF THE PROPOSALS TO BE BROUGHT BEFORE THE SPECIAL MEETING.
MOREOVER, EXECUTION OF THE GREEN AGENT DESIGNATION WILL NOT OBLIGATE YOU IN ANY
WAY TO TENDER YOUR COMMON STOCK PURSUANT TO THE OFFER.
BY AUTHORIZING THE CALL OF THE SPECIAL MEETING, YOU WILL ALLOW THE
COMPANY'S SHAREHOLDERS TO PROTECT THEIR INTERESTS IN THE COMPANY BY EXPRESSING
THEIR VIEWS ON THE OFFER DIRECTLY TO THE COMPANY BOARD.
CERTAIN INFORMATION ABOUT THE COMPANY
The information concerning the Company contained in this Solicitation
Statement has been taken from or based upon publicly available documents and
records on file with the Commission and other public sources and is qualified in
its entirety by reference thereto. None of SPG, its affiliates, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), the dealer manager for
the Offer, MacKenzie Partners, or Computershare Investor Services
("Computershare"), the depositary for the Offer, can take responsibility for the
accuracy or completeness of the information contained in such documents and
records, or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to SPG, its affiliates, Merrill Lynch, MacKenzie Partners, or
Computershare.
According to its Form 10-K for the year ended December 31, 2001, the
Company was incorporated in the State of Michigan in 1973 and shares of the
Company were first issued to the public in 1992. The principal executive offices
of the Company are located at 200 East Long Lake Road, Suite 300, P.O. Box 200,
Bloomfield Hills, Michigan 48303 and its telephone number is (248) 258-6800.
18
According to the September 30, 2002 10-Q, the Company is a real estate
investment trust, or REIT under the Code, and is the general partner of Taubman
L.P. Taubman L.P. is an operating subsidiary that engages in the ownership,
management, leasing, acquisition, development, and expansion of regional retail
shopping centers and interests therein.
The Company is subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's regional office located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Information
regarding the public reference facilities may be obtained from the Commission by
telephoning 1-800-SEC-0330. The Company's filings with the Commission are also
available to the public without charge on the Commission's website
(http://www.sec.gov). Copies of such materials also may be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Copies of many of the items filed
with the Commission and other information concerning the Company are available
for inspection at the offices of the NYSE located at 20 Broad Street, New York,
New York 10005.
CERTAIN INFORMATION ABOUT SPG INC., SPG L.P. AND THE PURCHASER
SPG Inc. is a self-administered and self-managed REIT under the Code. SPG
L.P. is a subsidiary, and the primary operating partnership, of SPG Inc. SPG
L.P. is engaged primarily in the ownership, development, management, leasing,
acquisition, and expansion of income-producing properties, primarily regional
malls and community shopping centers. Through its affiliated management
companies, SPG L.P. provides architectural, design, construction and other
services to the properties SPG Inc. owns or in which SPG Inc. holds an interest,
as well as to certain other regional malls and community shopping centers owned
by third parties. SPG Inc. and SPG L.P. own or hold an interest in 248
income-producing properties in the United States, which consist of 170 regional
malls, 69 community shopping centers, four specialty retail centers and five
office and mixed-use properties in 36 states. SPG Inc. and SPG L.P. also own an
interest in five parcels of land held for future development. In addition, SPG
Inc. and SPG L.P. have ownership interests in eight additional retail real
estate properties operating in Europe and Canada. SPG Inc.'s principal executive
offices are located at National City Center, 115 West Washington Street, Suite
15 East, Indianapolis, IN 46204, and its telephone number is (317) 636-1600.
The Purchaser is a Delaware corporation organized in November 2002 and a
wholly owned direct subsidiary of SPG Inc., with its principal offices located
at National City Center, 115 West Washington Street, Suite 15 East,
Indianapolis, IN 46204. The telephone number of the Purchaser is (317) 636-1600.
The Purchaser has not carried on any activities other than in connection with
the Offer and this Solicitation.
19
The Purchaser is not subject to the informational filing requirements of
the Exchange Act, and, accordingly, it does not file reports or other
information with the Commission relating to its business, financial condition
and other matters.
SPG Inc. is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Such reports, proxy statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's regional office located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
Commission by telephoning 1-800-SEC-0330. SPG Inc.'s filings are also available
to the public on the Commission's website (http://www.sec.gov). Copies of such
materials also may be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Copies of many of the items filed with the Commission and other
information concerning the Company are available for inspection at the offices
of the NYSE located at 20 Broad Street, New York, New York 10005.
As of December 16, 2002, SPG owned 11,000 Shares, in the aggregate. On
November 15, 2002, SPG Inc. purchased 1,000 Shares at a purchase price of $16.90
per Share in open market transactions. On November 27, 2002, the Purchaser
purchased 5,500 Shares at a purchase price of $16.20 per Share in open market
transactions. Additionally, on November 27, 2002, SPG Inc. purchased 2,700
Shares at a purchase price of $16.20 per share and 1,800 Shares at a purchase
price of $16.09 per Share, each in open market transactions.
SOLICITATION EXPENSES AND PROCEDURES
Agent Designations may be solicited by mail, telephone, facsimile and in
person. Solicitations may be made by directors, officers, investor relations
personnel and other employees of SPG or its affiliates, none of whom will
receive additional compensation for such solicitations. SPG has requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
of its solicitation materials to the beneficial owners of the Common Stock and
Series B Preferred Stock they hold of record. SPG Inc. will reimburse these
record holders for customary clerical and mailing expenses incurred by them in
forwarding these materials to their customers.
SPG Inc. has retained MacKenzie Partners for solicitation and advisory
services in connection with this Solicitation. MacKenzie Partners will be paid
reasonable and customary compensation and will be reimbursed for certain
reasonable out-of-pocket expenses for acting (a) as solicitor in connection with
this Solicitation Statement and (b) as Information Agent in connection with the
Offer. MacKenzie Partners may also receive additional reasonable and customary
compensation for providing additional advisory services in connection with this
Solicitation. SPG Inc. has also agreed to indemnify MacKenzie Partners against
certain liabilities and expenses, including liabilities and expenses under U.S.
state and federal securities laws. MacKenzie Partners will solicit Agent
Designations from individuals, brokers, banks, bank nominees and other
institutional holders.
20
The entire expense of soliciting Agent Designations for the Special
Meeting is being borne by SPG Inc. SPG Inc. will not seek reimbursement for such
expenses from the Company. Costs incidental to this Solicitation include
expenditures for printing, postage, legal and related expenses and are expected
to be approximately $_______. Total costs incurred to date in furtherance of or
in connection with this Solicitation are approximately $________.
------------------------
SPG Inc. has retained Merrill Lynch to act as the dealer manager and as
exclusive financial advisor to it in connection with the Offer. SPG Inc. has
agreed to pay Merrill Lynch reasonable and customary compensation for these
services and reimburse Merrill Lynch (in its capacity as dealer manager and
exclusive financial advisor) for its reasonable out-of-pocket expenses,
including the reasonable fees and expenses of its outside counsel, incurred in
connection with its engagement, and will indemnify Merrill Lynch and certain
related persons against certain liabilities and expenses, including liabilities
and expenses under the federal securities laws. At any time, Merrill Lynch and
its affiliates may actively trade the debt and equity securities of SPG Inc. and
its affiliates and the Company and its affiliates for their own account or for
the accounts of customers and, accordingly, may hold a long or short position in
those securities. Merrill Lynch and its affiliates render various financing,
investment banking and other advisory services to SPG Inc. and its affiliates
and are expected to continue to render such services, for which they have
received and expect to continue to receive customary compensation from SPG Inc.
and its affiliates.
SHAREHOLDER PROPOSALS
According to the Company's proxy statement relating to its 2002 Annual
Meeting of Shareholders, any notice of a qualified shareholder submitting a
proposal to be included in the Company's proxy statement for its 2003 Annual
Meeting of Shareholders must have been in proper form and must have been
received by the Company no later than December 10, 2002.
OTHER INFORMATION
Certain directors, executive officers and employees of SPG Inc. and its
affiliates, which persons may also assist MacKenzie Partners in soliciting
proxies, are listed on the attached SCHEDULE I. SCHEDULE II and SCHEDULE III set
forth certain information, as made available in public documents, regarding the
Company's capital stock held by the Company's principal shareholders and its
management.
THIS SOLICITATION STATEMENT IS NEITHER A REQUEST FOR THE TENDER OR
EXCHANGE OF SHARES NOR AN OFFER WITH RESPECT THERETO. THE PURCHASER'S OFFER IS
BEING MADE ONLY BY MEANS OF AND PURSUANT TO THE TERMS OF THE OFFER TO PURCHASE
AND RELATED LETTER OF TRANSMITTAL, AS FILED WITH THE COMMISSION.
Please indicate your support FOR the call of the Special Meeting by
completing, signing and dating the enclosed GREEN Agent Designation and promptly
returning it in the enclosed envelope to:
21
Simon Property Group, Inc.
Simon Property Acquisitions, Inc.
c/o MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
No postage is necessary if the envelope is mailed in the United States.
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
January __, 2003
22
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF SPG INC.
The following table sets forth the name of each director and executive
officer of SPG Inc. who may also assist MacKenzie Partners in soliciting proxies
from the Company's shareholders. Unless otherwise noted, each person's business
address is c/o Simon Property Group, Inc., National City Center, 115 West
Washington Street, Indianapolis, Indiana 46204. None of the officers, directors
or employees of SPG Inc. set forth in the table below will receive compensation
for soliciting proxies other than their ordinary compensation as an officer,
director or employee, as the case may be.
DIRECTORS AND EXECUTIVE OFFICERS OF SPG INC.
NAME AGE TITLE
---- --- -----
Birch Bayh................................ 74 Director
Melvyn E. Bergstein....................... 60 Director
Hans C. Mautner........................... 65 Vice Chairman of the Board
G. William Miller......................... 77 Director
J. Albert Smith, Jr....................... 62 Director
Pieter S. van den Berg.................... 56 Director
Philip J. Ward............................ 54 Director
Melvin Simon.............................. 76 Co-Chairman of the Board
Herbert Simon............................. 68 Co-Chairman of the Board
David Simon............................... 41 Chief Executive Officer and Director
Richard S. Sokolov........................ 52 President, Chief Operating Officer and Director
Fredrick W. Petri......................... 55 Director
M. Denise DeBartolo York.................. 51 Director
Randolph L. Foxworthy..................... 58 Executive Vice President - Corporate Development
William J. Garvey......................... 63 Executive Vice President - Property Development
Gary L. Lewis............................. 44 Executive Vice President - Leasing
John R. Neutzling......................... 50 Executive Vice President - Property Management
Stephen E. Sterrett....................... 47 Executive Vice President - Chief Financial Officer
James M. Barkley.......................... 50 General Counsel and Secretary
Andrew Juster............................. 50 Treasurer
I-1
SCHEDULE II
PRINCIPAL SHAREHOLDERS OF THE COMPANY
Set forth below is information regarding the Common Stock and the Series
B Preferred Stock owned by persons owning more than 5% of the total number of
shares of Common Stock and Series B Preferred Stock, on a combined basis. Such
information is derived from (i) the Company's Proxy Statement for its 2002
Annual Meeting (the "2002 Proxy Statement"), (ii) the September 30, 2002 10-Q,
(iii) the Schedule 13D of Robert S. Taubman and the other reporting persons
listed therein, filed on January 18, 2000 and amended by an Amendment No. 1 to
Schedule 13D, dated November 14, 2002 (the "Taubman Family Schedule 13D") and
(iv) the Company Schedule 14D-9. All percentages set forth below are based on a
total of 52,205,122 shares of Common Stock and 31,767,066 shares of Series B
Preferred Stock outstanding as of December 6, 2002, in each case based on the
Company Schedule 14D-9.
According to the Charter, the Series B Preferred Stock generally votes
with the Common Stock on all matters. As described above under "The Tender Offer
and Accompanying Litigation," however, SPG, as well as other shareholders of the
Company, have filed lawsuits regarding the legality of the voting rights of the
Series B Preferred Stock and the New 3% Shares held or controlled by the Taubman
Family. These lawsuits are based in part on a claim that the Series B Preferred
Stock issued to the Taubman Family should not have voting rights under the
Michigan Control Share Act. According to the Company's public filings, the
31,767,066 outstanding shares of Series B Preferred Stock are convertible into
shares of Common Stock at a rate of one share of Common Stock for each 14,000
shares of Series B Preferred Stock, in specified circumstances (any resulting
fractional shares will be redeemed for cash). Common Stock figures shown below
assume that outstanding shares of Series B Preferred Stock are not converted
into Common Stock.
Based on information reported in or based on the September 30, 2002 10-Q
and the 2002 Proxy Statement, SPG believes that certain holders of partnership
interests ("Units of Partnership Interests" or "Units") in The Taubman Realty
Group Limited Partnership ("TRG") have the ability to convert 7,097,979 Units
into an equal number of shares of Common Stock. Common Stock figures shown below
assume that outstanding Units are not converted into shares of Common Stock.
According to the September 30, 2002 10-Q and the Company Schedule 14D-9, SPG
believes there are options to purchase 2,878,273 Units outstanding (each of
which entitles the holder thereof to purchase one Unit which, in turn, is
convertible into one share of Common Stock). Common Stock figures shown below
assume that outstanding options to purchase Units are not exercised.
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Name and Address of Shares of Percent of Shares of Percent of Total Shares Percent of
Beneficial Owner Common Stock Common Series B Series B Beneficially Total Shares
Beneficially Stock Preferred Preferred Owned
Owned Stock Stock
Beneficially
Owned
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
A. Alfred Taubman 186,937(1) * 24,669,087(2) 77.7% 24,856,024 29.6%
1820 S. Ocean Blvd.
South Palm Beach, Florida
33480
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
II-1
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Name and Address of Shares of Percent of Shares of Percent of Total Shares Percent of
Beneficial Owner Common Stock Common Series B Series B Beneficially Total Shares
Beneficially Stock Preferred Preferred Owned
Owned Stock Stock
Beneficially
Owned
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
A. Alfred Taubman 186,937(1) * 24,669,087(2) 77.7% 24,856,024 29.6%
1820 S. Ocean Blvd.
South Palm Beach, Florida
33480
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Morgan Stanley, Dean 6,123,024(3) 11.7% 0 n/a 6,123,024 7.3%
Witter, & Co.
Morgan Stanley Dean Witter
Asset Management, Inc.
1585 Broadway
New York, NY 10036
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
Security Capital Group 5,327,175 10.2% 0 n/a 5,327,175 6.3%
Incorporated
Security Capital Research
Management Incorporated
125 Lincoln Avenue
Santa Fe, New Mexico 87501
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
LaSalle Investment 4,253,350(4) 8.1% 0 n/a 4,253,350 5.1%
Management, Inc.
LaSalle Investment
Management(Securities), L.P.
200 East Randolph Drive
Chicago, Illinois 60601
- ----------------------------- -------------- ------------ ---------------- ------------- -------------- --------------
- ------------
* less than 1%
(1) Based on information set forth in the 2002 Proxy Statement, includes 100
shares of Common Stock owned by Mr. A. Taubman's revocable trust and
186,837 shares of Common Stock held by TRA Partners ("TRAP"). Mr. A.
Taubman's trust is the managing general partner of TRAP and has the sole
authority to vote and dispose of the Common Stock held by TRAP. Mr. A.
Taubman disclaims any beneficial ownership of the Common Stock held by
TRAP and the other entities discussed in footnote (2) below beyond his
pecuniary interest in the entities that own the securities.
(2) Based on information set forth in the 2002 Proxy Statement, shares of
Series B Preferred Stock are owned by Mr. A. Taubman in the same manner
and in the same amounts as the Units of Partnership Interest (which Units
are not convertible into shares of Common Stock pursuant to the Second
Amended and Restated Continuing Offer, effective as of May 11, 2000, by
the Company to certain holders of Units) held by Mr. A. Taubman as
described below.
II-2
Mr. A. Taubman's holdings of Units of Partnership Interests consist of
9,875 Units of Partnership Interest held by Mr. A. Taubman's trust,
17,699,879 Units of Partnership Interest owned by TRAP, 11,011 Units of
Partnership Interest owned by Taubman Realty Ventures ("TRV"), of which
Mr. A. Taubman's trust is the managing general partner, and 1,975 Units
of Partnership Interest held by Taub-Co Management, Inc. ("Taub-Co").
Because, according to the 2002 Proxy Statement, the sole holder of voting
shares of Taub-Co is Taub-Co Holdings Limited Partnership, of which Mr.
A. Taubman's trust is the managing general partner, Mr. A. Taubman may be
deemed to be the beneficial owner of the Units of Partnership Interest
held by Taub-Co. According to the 2002 Proxy Statement, Mr. A. Taubman
disclaims beneficial ownership of any Units held by Taub-Co beyond his
pecuniary interest in Taub-Co. Also includes 6,327,098 Units of
Partnership Interest owned by TG Partners Limited Partnership ("TG
Partners"), 445,191 Units held by a subsidiary of TG Partners (such
subsidiary and TG Partners are collectively referred to as "TG") and
174,058 Units of Partnership Interest which are held by Courtney Lord,
the Company's Senior Vice President of Leasing, but for which Mr. Lord
has granted an irrevocable proxy to TG Partners. The 174,058 Units held
by Mr. Lord are not presently entitled to any partnership distributions
except in the event of a liquidation. Such Units will be released from
the irrevocable proxy and become entitled to receive distributions over
the three years remaining in the original five-year vesting period.
Because, according to the 2002 Proxy Statement, Mr. A. Taubman, through
control of TRV's and TG Partners' managing partner, has sole authority to
vote and (subject to certain limitations) dispose of the Units of
Partnership Interest held by TRV and TG, respectively, Mr. A. Taubman may
be deemed to be the beneficial owner of all of the Units of Partnership
Interest held by TRV and TG. Mr. A. Taubman disclaims beneficial
ownership of any Units of Partnership Interest held by TRV and TG beyond
his pecuniary interest in those entities. Mr. A. Taubman disclaims any
beneficial ownership of the Series B Preferred Stock held by TRAP and the
other entities discussed above in footnote (1) beyond his pecuniary
interest in the entities that own the securities. Schedule III to this
Solicitation Statement sets forth the security ownership of management.
All of the 24,856,024 shares reported as being beneficially owned by Mr.
A. Taubman described above in this note (2) and in note (1) are included
in the shares listed for Mr. Robert S. Taubman, Chairman of the Company
Board and Chief Executive Officer of the Company on Schedule III.
(3) Based on information set forth in the 2002 Proxy Statement, held on
behalf of various investment advisory clients, none of which holds more
than 5% of the Common Stock.
(4) Based on information set forth in the 2002 Proxy Statement, includes
ownership of Common Stock on behalf of Stichting Pensioenfonds Voor de
Gezondheid Geestelijke en Maatschappelijke Belangen.
II-3
SCHEDULE III
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is information regarding the Common Stock and the Series
B Preferred Stock owned by directors and officers of the Company, individually
and as a group on a combined basis. Such information is derived from (i) the
2002 Proxy Statement, (ii) the September 30, 2002 10-Q, (iii) the Taubman Family
Schedule 13D and (iv) the Company Schedule 14D-9. All percentages are based on
52,205,122 shares of Common Stock and 31,767,066 shares of Series B Preferred
Stock outstanding as of December 6, 2002, in each case based on the Company
Schedule 14D-9.
According to the Charter, the Series B Preferred Stock generally votes
with the Common Stock on all matters. As described above under "The Tender Offer
and Accompanying Litigation," however, SPG, as well as other shareholders of the
Company, has filed lawsuits regarding the legality of the voting rights of the
Series B Preferred Stock and the New 3% Shares held or controlled by the Taubman
Family. According to the Company's public filings, the 31,767,066 outstanding
shares of Series B Preferred Stock are convertible into shares of Common Stock
at a rate of one share of Common Stock for each 14,000 shares of Series B
Preferred Stock in specified circumstances (any resulting fractional shares will
be redeemed for cash). Unless otherwise noted, Common Stock figures shown below
assume that outstanding shares of Series B Preferred Stock are not converted
into Common Stock.
Based on information reported in or derived from the September 30, 2002
10-Q and the 2002 Proxy Statement, SPG believes that certain holders of Units
have the ability to convert 7,097,979 Units into an equal number of shares of
Common Stock. Unless otherwise noted, Common Stock figures shown below assume
that outstanding Units are not converted into shares of Common Stock. According
to the September 30, 2002 10-Q and the Company Schedule 14D-9, SPG believes
there are options to purchase 2,878,273 Units outstanding (each of which
entitles the holder thereof to purchase one Unit which, in turn, is convertible
into one share of Common Stock). Unless otherwise noted, Common Stock figures
shown below assume that outstanding options to purchase Units are not exercised.
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Name and Address of Beneficial Owner Shares of Percent Shares of Percent Total Shares Percent
Common Stock of Common Series B of Series Beneficially of Total
Beneficially Stock Preferred B Owned Shares
Owned Stock Preferred
Beneficially Stock
Owned
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Robert S. Taubman 2,215,101(1) 4.2% 26,784,060(2) 84.3% 28,999,161(3) 34.2%
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
William S. Taubman 747,564(4) 1.4% 5,925(5) * 753,489 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Lisa A. Payne 608,328(6) 1.2% 0 n/a 608,328 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Courtney Lord 2,034(7) * 193,095(8) * 195,129 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
III-1
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
John L. Simon 26,918(9) * 0 n/a 26,918 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Graham T. Allison 1,430 * 0 n/a 1,430 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Allan J. Bloostein 5,000 * 0 n/a 5,000 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Jerome A. Chazen 10,000 * 0 n/a 10,000(10) *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
S. Parker Gilbert 130,000(11) * 0 n/a 130,000 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Peter Karmanos, Jr. 40,000 * 0 n/a 40,000 *
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Esther R. Blum 0 n/a 0 n/a 0 n/a
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
Directors and Executive Officers as a Group 3,038,811 5.7% 26,977,155 84.9% 30,015,966 35.4%
- --------------------------------------------- -------------- ----------- --------------- ----------- --------------- -----------
- -----------------
* less than 1%
(1) Based on information set forth in the Taubman Family Schedule 13D,
consists of A) (1) 885,584 shares of Common Stock subject, in the
aggregate, to the following voting agreements: (1) Voting Agreement
among Mr. R. Taubman, Max M. Fisher, as Trustee of The Max M.
Fisher Revocable Trust, and Martinique Hotel, Inc. (the "Fisher
Agreement"); (2) Voting Agreement between Mr. R. Taubman and
John Rakolta Jr., Terry Rakolta, the Eileen Heather Vanderkloot
Irrevocable Trust, U/A dated 12/22/92, the Lauren Rakolta Irrevocable
Trust, U/A dated 12/22/92, the Paige Alexandra Rakolta Irrevocable
Trust, U/A dated 12/22/92 and the John Rakolta, III Irrevocable Trust,
U/A dated 12/22/92 (the "Rakolta Agreement"); and (3) Voting Agreement
between Mr. R. Taubman and Robert C. Larson as Trustee of the Robert C.
Larson Revocable Trust u/a/d 11/24/96, as amended (the "Larson
Agreement", and together with the Fisher Agreement and the Rakolta
Agreement, the "Voting Agreements"); B) 245,016 presently vested
options (each of which entitles the holder thereof to purchase one
Unit which, in turn, is convertible into one share of Common Stock)
granted to Mr. R. Taubman; C) 584,064 presently vested options (each
of which entitles the holder thereof to purchase one Unit which, in
turn, is convertible into one share of Common Stock) granted to William
S. Taubman; and D) 500,437 shares of Common Stock collectively held by
Mr. R. Taubman, together with The A. Alfred Taubman Restated
Irrevocable Trust, Mr. W. Taubman, TRA Partners, TRV, Taub-Co, TG
Partners and R&W-TRG LLC ("R&W") (the "Taubman Family").
(2) Based on information set forth in the Taubman Family Schedule 13D,
consists of 1,555,178 shares of Series B Preferred Stock subject, in the
aggregate, to the Voting Agreements and 25,228,882 shares of Series B
Preferred Stock held by the Taubman Family.
(3) Based on information set forth in the Taubman Family Schedule 13D,
pursuant to the Voting Agreements, Mr. R. Taubman has the sole and
absolute right to vote 885,584 shares of Common Stock and 1,555,178
shares of Series B Preferred Stock. As set forth in the Taubman Family
Schedule 13D, the Taubman Family holds 500,437 shares of Common Stock
(excluding the 245,016 and 584,064 presently vested options (each of
which entitles the holder thereof to purchase one Unit which, in turn, is
convertible into one share of Common Stock) granted to Mr. R. Taubman and
Mr. W. Taubman, respectively) and 25,228,882 shares of Series B Preferred
Stock. When combined with the shares of Common Stock and Series B
Preferred Stock subject to the Voting Agreements and excluding the vested
options referred to above, the Taubman Family Schedule 13D reports that
the Taubman Family and Mr. R. Taubman have the right to vote 26,784,060
shares of Series B Preferred Stock and 1,386,021 shares of Common Stock,
representing 33.6% of the outstanding voting stock of the Company
(calculated based on 52,183,395 shares of Common Stock and 31,767,066
shares of Series B Preferred Stock outstanding as of November 11, 2002).
III-2
Including the vested options referred to above, the percentage of total
shares would be 34.2% (calculated based on 52,205,122 shares of Common
Stock and 31, 767,066 shares of Series B Preferred Stock outstanding as
of December 6, 2002).
(4) Based on information set forth in the 2002 Proxy Statement and the
Taubman Family Schedule 13D, consists of 584,064 shares of Common Stock
that Mr. W. Taubman has the right to receive upon the exchange of Units
of Partnership Interest that are subject to vested options granted under
the 1992 Incentive Option Plan of TRG ("Incentive Options"), 150,000
shares of Common Stock owned by Mr. W. Taubman and 13,500 shares of
Common Stock owned by his children and for which Mr. W. Taubman disclaims
any beneficial interest. According to the 2002 Proxy Statement, excludes
all shares of Voting Stock held by TRAP, TRV, Taub-Co, or TG because Mr.
W. Taubman has no voting or dispositive control over such entities'
assets. Mr. W. Taubman disclaims any beneficial interest in the Voting
Stock held by TRAP, TRV, Taub-Co, and TG beyond his pecuniary interest in
the entities that own the securities.
(5) Based on information set forth in the 2002 Proxy Statement, excludes
547,945 shares of Series B Preferred Stock that R&W holds and that are
included in Mr. R. Taubman's holdings described in footnote (2) above.
According to the 2002 Proxy Statement, excludes all shares of Voting
Stock held by TRAP, TRV, Taub-Co, or TG because Mr. W. Taubman has no
voting or dispositive control over such entities' assets. Mr. W. Taubman
disclaims any beneficial interest in the Series B Preferred Stock held by
R&W and in the Voting Stock held by TRAP, TRV, Taub-Co, and TG beyond his
pecuniary interest in the entities that own the securities.
(6) Based on information set forth in the 2002 Proxy Statement, consists of
7,500 shares of Common Stock that Ms. Payne owns and 600,828 shares of
Common Stock that Ms. Payne will have the right to receive in exchange
for Units of Partnership Interest that are subject to vested Incentive
Options.
(7) Based on information set forth in the 2002 Proxy Statement, consists of
1,504 shares of Common Stock owned by Mr. Lord, 530 shares of Common
Stock owned by Mr. Lord's wife for which he disclaims any beneficial
interest.
(8) Based on information set forth in the 2002 Proxy Statement, consists of
193,095 shares of Series B Preferred Stock acquired by Mr. Lord in
exchange for all of Mr. Lord's equity interest in Lord Associates, Inc.
in November 1999. According to the 2002 Proxy Statement, does not include
174,058 shares of Series B Preferred Stock acquired by Mr. Lord in
connection with the Lord Associates transaction for which Mr. Lord has
granted to TG Partners an irrevocable proxy and over which Mr. Lord has
not voting or dispositive power.
(9) Based on information set forth in the 2002 Proxy Statement and the
Company Schedule 14D-9, consists of 23,727 shares of Common Stock that
Mr. Simon owns, 3,191 shares of Common Stock which Mr. Simon may be
deemed to own through his investment in the Taubman Centers Stock Fund,
one of the investment options under the Company's 401(k) Plan.
(10) Based on information set forth in the 2002 Proxy Statement, excludes
15,000 shares of Series A Cumulative Redeemable Stock ("Series A
Preferred Stock") owned by Mr. Chazen and 20,000 shares (or, in the
aggregate, less than 1%) of Series A Preferred Stock owned by his
children and for which Mr. Chazen disclaims any beneficial ownership. The
Series A Preferred Stock does not entitle its holders to vote.
(11) Based on information set forth in the 2002 Proxy Statement, includes
80,000 shares of Common Stock held by The Gilbert 1996 Charitable
Remainder Trust, an irrevocable trust of which Mr. Gilbert is a
co-trustee. According to the 2002 Proxy Statement, Mr. Gilbert disclaims
any beneficial interest in such shares beyond any deemed pecuniary
interest as the result of his wife's current beneficial interest in the
trust.
III-3
Except as otherwise noted, the information concerning the Company in this
Solicitation Statement has been taken from or is based upon documents and
records on file with the Commission and other publicly available information.
SPG disclaims any responsibility for the accuracy or completeness of the
information contained in such documents and records, or for any failure by the
Company or any other third party to disclose events that may have occurred any
may affect the significance or accuracy of any such information but which are
unknown to SPG.
III-1
IMPORTANT
Your action is important! No matter how many Shares you own, please give
SPG your Agent Designation by:
1. SIGNING the enclosed GREEN AGENT DESIGNATION;
2. DATING the enclosed GREEN AGENT DESIGNATION; and
3. MAILING the enclosed GREEN AGENT DESIGNATION TODAY in the envelope
provided (no postage is required if mailed in the United States).
If you hold your Shares in the name of one or more brokerage firms,
banks, nominees or other institution, only they can sign an Agent Designation
with respect to your Shares, and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to execute the GREEN AGENT DESIGNATION.
If you have any questions or require any additional information
concerning this Solicitation Statement, please contact MacKenzie Partners at the
address set forth below.
[MACKENZIE PARTNERS, INC. LOGO]
105 MADISON AVENUE
NEW YORK, NEW YORK 10016
CALL COLLECT: (212) 929-5500
OR
CALL TOLL-FREE: (800) 322-2885
FAX: (212) 929-0308
GREEN AGENT DESIGNATION CARD
AGENT DESIGNATION
TO SHAREHOLDERS OF TAUBMAN CENTERS, INC.
THIS AGENT DESIGNATION IS SOLICITED BY SIMON PROPERTY GROUP INC. AND
SIMON PROPERTY ACQUISITIONS, INC. FOR THE APPOINTMENT OF DESIGNATED AGENTS TO
CALL A SPECIAL MEETING OF THE SHAREHOLDERS OF TAUBMAN CENTERS, INC.
Each of the undersigned hereby constitutes and appoints Stephen E.
Sterrett, James M. Barkley, Esq. and Shelly J. Doran, and each of them, with
full power of substitution, the proxies and agents of the undersigned (said
proxies and agents, together with each substitute appointed by any of them, if
any, collectively, the "Designated Agents") in respect of all common stock, par
value $.01 per share and Series B Non-Participating Convertible Preferred Stock,
par value $.001 per share, of Taubman Centers, Inc. (the "Company") owned by the
undersigned to do any or all of the following, to which each of the undersigned
hereby consents:
1. To take all action necessary (including applying to the circuit
court in Oakland County, Michigan) to call (BUT NOT TO VOTE AT) a
special meeting of shareholders of the Company (the "Special
Meeting"), for the purpose of considering and voting upon the
Proposals as described in the Solicitation of Agent Designations
of Simon Property Group, Inc. and Simon Property Acquisitions,
Inc.;
2. Without limitation of the foregoing, to fix the date and time of
the Special Meeting or any adjournment thereof, and to give notice
of the Special Meeting or any adjournment thereof and the purposes
for which the Special Meeting or any adjournment thereof has been
called;
3. To exercise any and all other rights of each of the undersigned
incidental to (i) calling the Special Meeting, (ii) causing notice
of the Special Meeting to be given to the Company's shareholders
and (iii) causing the purposes of the authority expressly granted
herein to the Designated Agents to be carried into effect;
provided, however, that NOTHING CONTAINED IN THIS INSTRUMENT SHALL
BE CONSTRUED TO GRANT THE DESIGNATED AGENTS THE RIGHT, POWER OR
AUTHORITY TO VOTE ANY SHARES OWNED BY THE UNDERSIGNED AT THE
SPECIAL MEETING.
Date: _________________, 2003
---------------------------------------------
Signature
---------------------------------------------
Signature, if jointly held
Title:
--------------------------------------
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should sign.
When signing as an attorney, executor,
administrator, trustee or guardian, give full title
as such. If a corporation, sign in full corporate
name by President or other authorized officer. If a
partnership, sign in partnership name by authorized
person.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
Exhibit 99(a)(5)(C)
[LETTERHEAD OF SIMON PROPERTY GROUP]
CONTACTS:
INVESTORS MEDIA
Shelly Doran George Sard/Paul Caminiti/Hugh Burns
Simon Property Group, Inc. Citigate Sard Verbinnen
317/685-7330 212/687-8080
SIMON PROPERTY GROUP FILES PRELIMINARY PROXY MATERIALS
TO CALL SPECIAL MEETING OF TAUBMAN SHAREHOLDERS
MEETING WOULD GIVE SHAREHOLDERS OPPORTUNITY TO FACILITATE CONSUMMATION
OF SIMON'S $18.00 PER SHARE ALL-CASH OFFER
----------------------------------------------
INDIANAPOLIS, December 16, 2002 - Simon Property Group, Inc. ("SPG") (NYSE: SPG)
today announced that it has filed a preliminary proxy statement with the
Securities and Exchange Commission to enable SPG to solicit proxies from
shareholders of Taubman Centers, Inc. ("Taubman") (NYSE: TCO) to call a special
meeting of Taubman's shareholders. Under its charter, Taubman is required to
hold a special meeting if presented with proxies from holders of at least 25% of
Taubman's outstanding shares.
At the meeting, Taubman shareholders would be asked to vote for proposals that
would facilitate the consummation of Simon's $18.00 per share cash tender offer
for Taubman shares, including a proposal to amend the Taubman charter so that
the purchase of shares by SPG in connection with its tender offer would not
trigger Taubman's Excess Share Provision.
"We are taking the necessary steps to restore the right of Taubman's public
shareholders -- who own 99% of the company -- to decide for themselves whether
to accept our premium, all-cash offer," said David Simon, Chief Executive
Officer of Simon Property Group. "We call on the independent Taubman Board
members to fulfill their fiduciary obligations and remove the family-imposed
impediments to shareholder democracy."
As previously announced, the tender offer and withdrawal rights will expire at
12:00 midnight, New York City time, January 17, 2003, unless extended.
The complete terms and conditions of the offer are set forth in the Offer to
Purchase, copies of which are available by contacting the information agent,
MacKenzie Partners, Inc. at (800) 322-2885. Merrill Lynch & Co. is acting as
exclusive financial advisor to SPG and is the Dealer Manager for the Offer.
Willkie Farr & Gallagher is acting as legal advisor to SPG, and Simpson Thacher
& Bartlett is acting as legal advisor to Merrill Lynch & Co.
ABOUT SIMON PROPERTY GROUP
Headquartered in Indianapolis, Indiana, Simon Property Group is a real estate
investment trust engaged in the ownership and management of income-producing
properties, primarily regional malls and community shopping centers. Through its
subsidiary partnerships, it currently owns or has an interest in 248 properties
containing an aggregate of 185 million square feet of gross leasable area in 36
states, as well as eight assets in Europe and Canada and ownership interests in
other real estate assets. Additional Simon Property Group information is
available at http://about.simon.com/corpinfo/index.html.
IMPORTANT INFORMATION
This news release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any Taubman shares, and is not a
solicitation of a proxy. SPG and Simon Property Acquisitions, Inc., a wholly
owned subsidiary of SPG, filed a tender offer statement on Schedule TO with the
Securities and Exchange Commission on December 5, 2002, with respect to its
offer to purchase all outstanding shares of Taubman common stock. Investors and
security holders are urged to read this tender offer statement, the preliminary
proxy statement filed December 16, 2002, and any other proxy statement relating
to the tender offer described in this press release because they will contain
important information. Each such other proxy statement will be filed with the
Securities and Exchange Commission. Investors and security holders may obtain a
free copy of the tender offer statement, each such proxy statement and other
documents filed by SPG with the Commission at the Commission's web site at:
http://www.sec.gov. The tender offer statement, any proxy statement and any
related materials may also be obtained for free by directing such requests to
Mackenzie Partners, Inc. at (800) 322-2885.
FORWARD-LOOKING STATEMENTS
This release contains some forward-looking statements as defined by the federal
securities laws which are based on our current expectations and assumptions,
which are subject to a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated, projected or implied. We
undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
# # #
-2-
SIMON
PROPERTY GROUP
--------------
CONTACTS:
INVESTORS MEDIA
Shelly Doran George Sard/Hugh Burns/Kim Levy
Simon Property Group, Inc. Citigate Sard Verbinnen
317/685-7330 212/687-8080
SIMON PROPERTY GROUP WILL PROCEED WITH ITS
$18.00 PER SHARE CASH OFFER FOR TAUBMAN CENTERS, INC.
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INDIANAPOLIS, DECEMBER 11, 2002 - Simon Property Group, Inc. (NYSE: SPG)
today issued the following statement in response to today's rejection by
Taubman Centers, Inc. (NYSE: TCO) of Simon's premium all-cash offer:
"TCO's public shareholders, who own 99% of the Company, should be the ones
who decide whether SPG's all-cash $18 offer -- a price higher than the shares
have ever traded --is `inadequate'. We are proceeding with our tender offer
and litigation to challenge TCO's continuing efforts to disenfranchise its
public shareholders. Now that TCO has opted out of the Michigan Control Share
Act to avoid a shareholder referendum on SPG's tender offer, if TCO
shareholders want the opportunity to receive $18 per share in cash, they must
tender into our offer by January 17 and support our efforts to invalidate the
Taubman family's illegally obtained blocking position."
As previously announced, the tender offer and withdrawal rights are scheduled
to expire at 12:00 midnight, New York City time, January 17, 2003, unless
extended.
The complete terms and conditions of the offer are set forth in the Offer to
Purchase, copies of which are available by contacting the information agent,
MacKenzie Partners, Inc. at (800) 322-2885. Merrill Lynch & Co. is acting as
exclusive financial advisor to SPG and is the Dealer Manager for the Offer.
Willkie Farr & Gallagher is acting as legal advisor to SPG, and Simpson
Thacher & Bartlett is acting as legal advisor to Merrill Lynch & Co.
ABOUT SIMON PROPERTY GROUP
Headquartered in Indianapolis, Indiana, Simon Property Group is a real estate
investment trust engaged in the ownership and management of income-producing
properties, primarily regional malls and community shopping centers. Through
its subsidiary partnerships, it currently owns or has an interest in 248
properties containing an aggregate of 185 million square feet of gross
leasable area in 36 states, as well as eight assets in Europe and Canada and
ownership interests in other real estate assets. Additional Simon Property
Group information is available at http://about.simon.com/corpinfo/index.html.
# # #
IMPORTANT INFORMATION
This news release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any Taubman shares, and is not a
solicitation of a proxy. Investors and security holders are urged to read any
proxy statement relating to the tender offer described in this press release
because it will contain important information. Each such proxy statement will be
filed with the Securities and Exchange Commission. Investors and security
holders may obtain a free copy of the tender offer statement, each such proxy
statement and other documents filed by SPG with the Commission at the
Commission's web site at: http://www.sec.gov. The tender offer statement, any
proxy statement and any related materials may also be obtained for free by
directing such requests to MacKenzie Partners, Inc. at (800) 322-2885.
FORWARD-LOOKING STATEMENTS
This release contains some forward-looking statements as defined by the federal
securities laws which are based on our current expectations and assumptions,
which are subject to a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated, projected or implied. We
undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
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