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OMB APPROVAL
OMB Number: 3235-0515
Expires: April 30, 2005
Estimated average burden
hours per response: 43.5
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. 27)
TAUBMAN CENTERS, INC.
(Name of Subject Company (Issuer))
SIMON PROPERTY ACQUISITIONS, INC.
SIMON PROPERTY GROUP, INC.
WESTFIELD AMERICA, 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. Peter R. Schwartz, Esq.
Simon Property Group, Inc. Westfield America Inc.
National City Center 11601 Wilshire Boulevard
115 West Washington Street 12th Floor
Suite 15 East Los Angeles, CA 90025
Indianapolis, IN 46024 Telephone: (310) 445-2427
Telephone: (317) 636-1600
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
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Copies to:
Steven A. Seidman, Esq. Scott V. Simpson, Esq.
Robert B. Stebbins, Esq. Skadden, Arps, Slate, Meagher & Flom LLP
Willkie Farr & Gallagher One Canada Square
787 Seventh Avenue Canary Wharf
New York, New York 10019 London, E14 5DS, England
Telephone: (212) 728-8000 Telephone: (44) 20 7519 7000
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$1,193,880,540 $238,776.11
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* Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying $20.00, the per share tender offer price, by
59,694,027 shares of Common Stock, consisting of (i) 50,908,965 outstanding
shares of Common Stock, (ii) 2,270 shares of Common Stock issuable upon
conversion of 31,784,842 outstanding shares of Series B Non-Participating
Convertible Preferred Stock, (iii) 7,202,785 shares of Common Stock
issuable upon conversion of outstanding partnership units of The Taubman
Realty Group, Limited Partnership ("TRG") and (iv) 1,580,007 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 Amendment
No. 1 to the Registrant's Preliminary Proxy Statement on Schedule 14A filed
on February 25, 2003, the Registrant's Schedule 14D-9 filed on December 11,
2002 and the Registrant's Annual Report on Forms10-K and 10-K/A for the
year ended December 31, 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: $248,745.11 Filing Party: Simon Property Group, Inc.; Simon Property
Form or Registration No.: Schedule TO (File No. 005-42862), Acquisitions, Inc.; Westfield America, Inc.
Amendment No. 1 to the Schedule TO Date Filed: December 5, 2002, December 16, 2002 and
and Amendment No. 5 to the Schedule TO January 15, 2003
|_| 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. 27 amends and supplements the Tender Offer Statement on
Schedule TO originally filed with the Securities and Exchange Commission (the
"Commission") on December 5, 2002, as amended and supplemented by Amendment No.
1 thereto filed with the Commission on December 16, 2002, by Amendment No. 2
thereto filed with the Commission on December 27, 2002, by Amendment No. 3
thereto filed with the Commission on December 30, 2002, by Amendment No. 4
thereto filed with the Commission on December 31, 2002, by Amendment No. 5
thereto filed with the Commission on January 15, 2003, by Amendment No. 6
thereto filed with the Commission on January 15, 2003, by Amendment No. 7
thereto filed with the Commission on January 16, 2003, by Amendment No. 8
thereto filed with the Commission on January 22, 2003, by Amendment No. 9
thereto filed with the Commission on January 23, 2003, by Amendment No. 10
thereto filed with the Commission on February 7, 2003, by Amendment No. 11
thereto filed with the Commission on February 11, 2003, by Amendment No. 12
thereto filed with the Commission on February 18, 2003, by Amendment No. 13
thereto filed with the Commission on February 21, 2003, by Amendment No. 14
thereto filed with the Commission on February 21, 2003, by Amendment No. 15
thereto filed with the Commission on February 27, 2003, by Amendment No. 16
thereto filed with the Commission on February 27, 2003, by Amendment No. 17
thereto filed with the Commission on February 28, 2003, by Amendment No. 18
thereto filed with the Commission on March 3, 2003, by Amendment No. 19 thereto
filed with the Commission on March 6, 2003, by Amendment No. 20 thereto filed
with the Commission on March 18, 2003, by Amendment No. 21 thereto filed with
the Commission on March 21, 2003, by Amendment No. 22 thereto filed with the
Commission on March 28, 2003, by Amendment No. 23 thereto filed with the
Commission on March 31, 2003, by Amendment No. 24 thereto filed with the
Commission on April 30, 2003, by Amendment No. 25 thereto filed with the
Commission on May 2, 2003 and by Amendment No. 26 thereto filed with the
Commission on May 9, 2003 (as amended and supplemented, 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 "Shares"), of
Taubman Centers, Inc. (the "Company") at a purchase price of $20.00 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 the Supplement to the Offer to Purchase, dated
January 15, 2003 (the "Supplement"), and in the related revised Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer"). This Amendment No. 27 to the Schedule TO is being filed
on behalf of the Purchaser, SPG Inc. and Westfield America, Inc. ("WEA").
Capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Offer to Purchase, the Supplement and the Schedule
TO, as applicable.
The item numbers and responses thereto below are in accordance with the
requirements of Schedule TO.
Item 11. ADDITIONAL INFORMATION.
On May 12, 2003, SPG Inc., the Purchaser and WEA filed with the
Commission Amendment No. 2 to the Preliminary Solicitation
Statement initially filed on February 21, 2003 under cover of
Schedule 14A pursuant to the Securities Exchange Act of 1934, as
amended (the "Amended Preliminary Soliciation Statement"),
relating to the solicitation of proxies from the Company's
shareholders with respect to a special meeting of the Company's
shareholders to be called by SPG Inc., the Purchaser and WEA. A
copy of the Amended Preliminary Soliciation Statement is filed
herewith as Exhibit (a)(5)(XX).
Item 12. EXHIBITS.
(a)(5)(XX) Amendment No. 2 to the Preliminary Solicitation Statement in
respect of a special meeting of the shareholders of Taubman
Centers, Inc. to be called by SPG Inc., the Purchaser and WEA as
filed with the Securities and Exchange Commission on May 12,
2003.
SIGNATURE
After due inquiry and to the best of their knowledge and
belief, the undersigned hereby certify as of May 12, 2003 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
After due inquiry and to the best of its knowledge and belief,
the undersigned hereby certifies as of May 12, 2003 that the information set
forth in this statement is true, complete and correct.
WESTFIELD AMERICA, INC.
By: /S/ PETER R. SCHWARTZ
-------------------------------
Name: Peter R. Schwartz
Title: Senior Executive Vice President
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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(a)(5)(XX) Amendment No. 2 to the Preliminary Solicitation Statement in
respect of a special meeting of the shareholders of Taubman
Centers, Inc. to be called by SPG Inc., the Purchaser and
WEA as filed with the Securities and Exchange Commission on
May 12, 2003.
Ex (a)(5)(XX)
OMB APPROVAL
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OMB NUMBER 3235-0059
EXPIRES: AUGUST 31, 2004
ESTIMATED AVERAGE BURDEN
HOURS PER RESPONSE.....14.73
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
(Amendment No. 2)
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.
WESTFIELD AMERICA, 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 Preliminary Revocation Solicitation Statement on
Schedule 14A filed on February 25, 2003, Amendment No. 1 to the
Registrant's Schedule 14D-9 filed on December 11, 2002 and the
Registrant's Annual Report on Form 10-K, as amended by the Form 10-K/A,
for the year ended December 31, 2002, 59,694,027 shares of Common
Stock, consisting of (i) 50,908,965 outstanding shares of Common Stock,
(ii) 2,270 shares of Common Stock issuable upon conversion of the
31,784,842 outstanding shares of Series B Non-Participating Convertible
Preferred Stock, (iii) 7,202,785 shares of Common Stock issuable upon
conversion of outstanding partnership units of The Taubman Realty Group
Limited Partnership ("TRG") and (iv) 1,580,007 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 $20.00,
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 59,694,027 shares of Common Stock.
(4) Proposed maximum aggregate value of transaction: $1,193,880,540.
(5) Total fee paid: $238,776.11.
/ / 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: $248,745.11.
(2) Form, Schedule or Registration Statement No.: Schedule TO, File No.
005-42862, Amendment No. 1 to the Schedule TO and Amendment No. 5 to
the Schedule TO.
(3) Filing Party: Simon Property Group, Inc.; Simon Property Acquisitions,
Inc.; Westfield America, Inc.
(4) Dates Filed: December 5, 2002, December 16, 2002 and January 15, 2003.
Preliminary Materials dated May 12, 2003
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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
CALLING OF A SPECIAL MEETING OF SHAREHOLDERS
OF
TAUBMAN CENTERS, INC.
PRELIMINARY SOLICITATION STATEMENT
OF
SIMON PROPERTY GROUP, INC.
SIMON PROPERTY ACQUISITIONS, INC.
WESTFIELD AMERICA, INC.
TO THE SHAREHOLDERS OF TAUBMAN CENTERS, INC.:
This Solicitation Statement (this "Solicitation Statement") and the
enclosed GREEN Agent Designation card (the "Agent Designation") 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" or
"TCO"), in connection with the solicitation (this "Solicitation") of Agent
Designations by and on behalf of Simon Property Group, Inc. ("SPG Inc."), a
Delaware corporation, 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., and Westfield America,
Inc. ("WEA"), a Missouri corporation, to provide for the calling of a special
meeting of shareholders of the Company for the purposes described herein (the
"Special Meeting"). The date of this Solicitation Statement is May __, 2003.
This Solicitation Statement and the enclosed GREEN Agent Designation are
first being sent or given to the Company's shareholders on or about May __,
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
$20.00 PER SHARE IN CASH BY URGING YOU TO CALL THE SPECIAL MEETING. FOR A
DESCRIPTION OF THE TERMS AND CONDITIONS OF THE OFFER (AS 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 FRUSTRATE THE ABILITY OF THE
COMPANY'S COMMON SHAREHOLDERS TO RECEIVE $20.00 PER SHARE IN CASH IN THE OFFER.
DESPITE THE FACT THAT APPROXIMATELY 85% OF THE COMMON STOCK WAS TENDERED INTO
THE OFFER AS OF FEBRUARY 14, 2003, THE COMPANY BOARD CONTINUES TO REFUSE TO TAKE
STEPS TO FACILITATE THE CONSUMMATION OF THE OFFER. SPG AND WEA BELIEVE THAT THE
COMPANY'S COMMON SHAREHOLDERS, AND NOT THE TAUBMAN FAMILY, SHOULD DECIDE THE
FUTURE OF THE COMPANY AND THAT THE COMPANY BOARD SHOULD NOT PREVENT THE
COMPANY'S COMMON SHAREHOLDERS FROM RECEIVING $20.00 PER SHARE IN CASH FOR THEIR
SHARES IN THE OFFER. THEREFORE, SPG AND WEA URGE YOU TO SIGN AND RETURN THE
GREEN AGENT DESIGNATION TO FACILITATE THE CALLING OF THE SPECIAL MEETING.
i
AT THE SPECIAL MEETING, THE COMPANY'S SHAREHOLDERS WILL HAVE THE OPPORTUNITY TO
VOTE ON PROPOSALS TO, AMONG OTHER THINGS, REMOVE A KEY IMPEDIMENT TO THE OFFER
BY AMENDING THE COMPANY'S RESTATED ARTICLES OF INCORPORATION (AS AMENDED, THE
"CHARTER").
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
REMOVE AN IMPEDIMENT TO THE CONSUMMATION OF THE OFFER. 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 the Information Agent for the Offer, MacKenzie
Partners, Inc. ("MacKenzie Partners"), for delivery to the Company on or before
__________, 2003 or such later date as SPG and WEA may from time to time
establish in accordance with the procedures set forth under the heading "Agent
Designation Procedures."
For the Special Meeting to be called and held pursuant to the Company's
Restated By-Laws (as amended, 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 (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 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.
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 PROPOSAL PRESENTED AT THE SPECIAL MEETING.
Pursuant to this Solicitation Statement, SPG and WEA are soliciting Agent
Designations from the holders of outstanding shares of Common Stock and Series B
Preferred Stock to provide for the calling of 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 or to 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. At the Special Meeting, SPG and WEA will, among other things,
ask you to consider and vote upon a proposal to amend the Charter to provide
that the Excess Share Provision (as defined below) would not apply to SPG, WEA
or their respective affiliates (the "Excess Share Proposal"). The Excess Share
Proposal is described in detail under the heading "The Special Meeting - The
Excess Share Proposal." The purpose of the Excess Share Proposal is to remove an
impediment to the consummation of the Offer. Additionally, SPG and WEA reserve
the right to cause additional proposals to be identified in the notice of, and
in the proxy materials for, the Special Meeting and to modify the Excess Share
Proposal or any other proposal of SPG and WEA. In addition, SPG and WEA expect
to request authority to initiate a vote for a proposal to recess, adjourn or
reschedule the Special Meeting for any reason, including to allow inspectors of
the election to certify the outcome of the vote on the Excess Share Proposal or
any other proposal, and to allow the solicitation of additional votes, if
necessary, to approve the Excess Share Proposal or any other proposal.
AS OF 12:00 MIDNIGHT ON FEBRUARY 14, 2003, APPROXIMATELY 85% OF THE
COMPANY'S OUTSTANDING COMMON STOCK HAD BEEN VALIDLY TENDERED INTO THE OFFER AND
NOT WITHDRAWN. NOTWITHSTANDING THIS OVERWHELMING MANDATE FROM THE COMPANY'S
COMMON SHAREHOLDERS, ON FEBRUARY 17, 2003, TWO HOURS AFTER SPG'S AND WEA'S
ANNOUNCEMENT OF THE EXTENSION OF THE OFFER AND THE OVERWHELMING RESULTS OF THE
OFFER, THE COMPANY ANNOUNCED THAT THE COMPANY BOARD
ii
CONTINUED TO OPPOSE THE OFFER AND WOULD NOT TAKE STEPS TO FACILITATE THE OFFER.
THE COMPANY BOARD HAS A FIDUCIARY DUTY TO ACT IN THE BEST INTERESTS OF THE
COMPANY'S COMMON SHAREHOLDERS, WHO OWN APPROXIMATELY 99% OF THE ECONOMIC VALUE
OF THE COMPANY. AS DIRECTORS OF A PUBLIC COMPANY, THE MEMBERS OF THE COMPANY
BOARD SHOULD NOT ABDICATE THEIR FIDUCIARY OBLIGATIONS BY HIDING BEHIND THE
DICTATES OF ANY PARTICULAR GROUP OF SHAREHOLDERS, PARTICULARLY SHAREHOLDERS
(LIKE THE TAUBMAN FAMILY) WITH INTERESTS DIVERGENT FROM THOSE OF THE COMPANY'S
COMMON SHAREHOLDERS.
Two-thirds (2/3) of the voting power of the Company's voting
securities is needed to approve the Excess Share Proposal. In an Opinion
and Order dated May 1, 2003, as superseded by an amended Opinion and Order
dated May 8, 2003 (as so amended, the "Opinion and Order"), the United
States District Court for the Eastern District of Michigan (the "Court")
held that the shares of Series B Preferred Stock and Common Stock held by
members of the Taubman family and certain associates of the Taubman family
that together purportedly comprised approximately 33.6% of the Company's
voting power cannot be voted until voting rights are conferred on such
shares through a disinterested shareholder vote in compliance with the
Michigan Control Share Act. Accordingly, based on 50,908,965 shares of
Common Stock and 31,784,842 shares of Series B Preferred Stock issued and
outstanding as of April 28, 2003, and 11,000 shares of Common Stock owned
by SPG as of the date of this Solicitation Statement, and excluding
26,784,060 shares of Series B Preferred Stock and 1,386,021 shares of
Common Stock subject to the Opinion and Order that are held or controlled by
the Taubman family and certain associates of the Taubman family, the
approval of the Excess Share Proposal requires the affirmative vote of the
holders of 36,338,151 shares of Common Stock and Series B Preferred Stock
on a combined basis.
On May 9, 2003, the Company, the Company Board and certain members of the
Taubman family named as defendants in SPG's complaint filed a notice of appeal
from the Opinion and Order. The Company, the Company Board and certain members
of the Taubman family also filed a motion in the Court to suspend the injunction
set forth in the Opinion and Order pending appeal to the United States Court of
Appeals for the Sixth Circuit. The motion is currently pending.
THE COMPANY BOARD HAS REPEATEDLY REJECTED THE $20.00 PER SHARE OFFER AND
HAS STATED THAT THE TAUBMAN FAMILY IS CATEGORICALLY OPPOSED TO A SALE OF THE
COMPANY. IF YOU BELIEVE THAT YOU (AND NOT THE TAUBMAN FAMILY) SHOULD DECIDE THE
FUTURE OF YOUR COMPANY AND THAT YOU SHOULD HAVE THE OPPORTUNITY TO RECEIVE
$20.00 PER SHARE IN CASH FOR ALL OF YOUR SHARES OF COMMON STOCK, SPG AND WEA
URGE YOU TO SIGN AND RETURN YOUR GREEN AGENT DESIGNATION PROMPTLY.
This Solicitation is being made by SPG and WEA, and not on behalf of the
Company Board. At this time, SPG and WEA are only soliciting your Agent
Designation for the purpose of calling the Special Meeting. SPG and WEA are not
currently seeking your proxy, consent or authorization for approval of the
Excess Share Proposal or any other proposal at the Special Meeting. After the
Special Meeting has been called, SPG and WEA will send you proxy materials
urging you to vote in favor of the proposals to be voted upon at the Special
Meeting.
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 CALLING OF THE SPECIAL MEETING AND MAY IMPEDE CONSUMMATION OF THE
OFFER AND THEREBY THE ABILITY OF THE COMMON SHAREHOLDERS TO RECEIVE $20.00 PER
SHARE IN CASH FOR THEIR SHARES OF COMMON STOCK PURSUANT TO THE OFFER.
If your shares of Common Stock and/or Series B Preferred Stock 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 of Common Stock and/or Series B Preferred Stock are held in the
name of a brokerage firm, bank, bank nominee or other institution, only the
brokerage
iii
firm, bank, bank nominee or other institution can execute an Agent Designation
for such shares of Common Stock and/or Series B Preferred Stock and will do so
only upon receipt of specific instructions from the beneficial owner of such
shares of Common Stock and/or Series B Preferred Stock. Accordingly, each
shareholder who holds shares of Common Stock and/or Series B Preferred Stock
through a nominee such as a brokerage firm, bank, bank nominee or other
institution must contact the person responsible for the shareholder's account
and advise that person to execute and return the accompanying GREEN Agent
Designation. SPG and WEA urge you to confirm in writing your instructions to the
person responsible for your account and to provide a copy of such instructions
to SPG and WEA, care of MacKenzie Partners at the address below, so that SPG and
WEA 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......................................................................6
BACKGROUND OF THE TENDER OFFER...................................................................................12
AGENT DESIGNATION PROCEDURES.....................................................................................19
THE SPECIAL MEETING..............................................................................................21
GENERAL.....................................................................................................21
THE EXCESS SHARE PROPOSAL...................................................................................21
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS..........................................................22
CERTAIN INFORMATION ABOUT THE COMPANY............................................................................23
CERTAIN INFORMATION ABOUT SPG INC., SPG L.P., THE PURCHASER AND WEA IN THE SOLICITATION.........................24
SOLICITATION EXPENSES AND PROCEDURES.............................................................................25
SHAREHOLDER PROPOSALS............................................................................................26
OTHER INFORMATION................................................................................................26
SCHEDULE I......................................................................................................I-1
SCHEDULE II....................................................................................................II-1
SCHEDULE III..................................................................................................III-1
v
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" or "TCO"), to express SPG
Inc.'s interest in pursuing a business combination involving 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
a proposal by SPG Inc. to acquire the Company 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. On October 28, 2002, the Board of Directors of the Company
(the "Company Board") rejected SPG Inc.'s proposed 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
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 (as such price may be
amended in connection with the Offer, the "Offer Price"), upon the terms and
subject to the conditions set forth in an Offer to Purchase (the "Offer to
Purchase") and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, constitute the "Offer"), which were filed as
exhibits to SPG's Tender Offer Statement on Schedule TO (as amended, the
"Schedule TO") dated December 5, 2002.
On December 5, 2002, SPG Inc. and the Purchaser filed a complaint for
declaratory and injunctive relief in the United States District Court for the
Eastern District of Michigan (the "Court") against the Company, the Company
Board and certain members of the Taubman family (as amended, the "Complaint"),
challenging a series of tactical corporate mechanisms that purportedly gave the
Taubman family a blocking position against the Offer.
On December 11, 2002, the Company filed a Schedule 14D-9 (as amended, the
"Company Schedule 14D-9") with the Securities and Exchange Commission (the
"Commission") announcing that the Company Board had made certain amendments (the
"December 10 By-Laws Amendments") to the Company's Restated By-Laws (as amended,
the "By-Laws") on December 10, 2002. The December 10 By-Laws Amendments included
an amendment to opt out of the Michigan Control Share Act and made certain other
changes, including requiring advance notice for shareholder nominations and
proposals. The Company Schedule 14D-9 also recommended that the Company's common
shareholders reject the Offer. The recommendation was made despite the fact that
the Offer Price at that time represented 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).
1
On December 16, 2002, SPG filed a preliminary proxy statement with the
Commission relating to the solicitation of agent designations from the Company's
shareholders to provide for the calling of a special meeting of the Company's
shareholders. On December 16, 2002, SPG also filed an amendment to the Schedule
TO announcing that certain conditions to the Offer, based on information
disclosed by the Company in the Company Schedule 14D-9, had been satisfied as of
that date.
On December 20, 2002, the Company filed a preliminary revocation
solicitation statement with the Commission and announced that the Company had
made additional amendments to the By-Laws relating to the timing and procedures
to call a special meeting of the Company's shareholders (the "December 20
By-Laws Amendments").
On December 30, 2002, SPG Inc. and the Purchaser filed an amended complaint
(the "First Amended Complaint") with the Court against the Company, the Company
Board and certain members of the Taubman family, which, among other things,
challenged the validity of the December 20 By-Laws Amendments.
On January 15, 2003, SPG Inc., Westfield America, Inc., a Missouri
corporation ("WEA"), and the Purchaser announced that WEA had joined the Offer
and that they had entered into an Offer Agreement (the "Offer Agreement"), which
provides, among other things, that (i) all decisions with respect to the Offer
shall be made jointly by SPG Inc. and WEA and (ii) if the Offer is consummated,
WEA (or its designated assignee) will acquire 50% of the Purchaser at a purchase
price equal to 50% of the aggregate Offer Price paid by the Purchaser in the
Offer, and SPG Inc. and WEA will jointly control the Common Stock purchased in
the Offer.
On that same day, SPG and WEA announced that the Offer Price was increased
to $20.00, that the expiration date of the Offer was extended to February 14,
2003 and that unless two-thirds (2/3) of the outstanding Common Stock, or
34,805,171 Shares (based on the number of Shares outstanding as of December 16,
2002), were validly tendered and not withdrawn prior to 12:00 midnight New York
City time on February 14, 2003, SPG and WEA would withdraw the Offer and
terminate their efforts to acquire the Company. SPG and WEA filed with the
Commission and distributed to the Company's common shareholders a Supplement to
the Offer to Purchase, dated January 15, 2003 (the "Supplement"), a revised
Letter of Transmittal and the related revised Offer materials.
On January 21, 2003, the Company filed an amendment to 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 $20.00
per Share Offer Price represents a 50% 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 and WEA do not believe that the Company's
recommendation is in the best interests of the Company's common shareholders
because SPG and WEA believe the Company's common shareholders should be given
the opportunity to decide for themselves whether to tender their Shares and
receive $20.00 in cash per Share in the Offer.
On February 5, 2003, SPG filed a second amended complaint (the "Second
Amended Complaint") with the Court against the Company, the Company Board and
certain members of the Taubman family. The Second Amended Complaint included
amendments to add Mr. Randall J. Smith, a holder of Common Stock, as a plaintiff
and to update information regarding the Offer to reflect certain changes to the
Offer since the filing of the First Amended Complaint.
On February 10, 2003, the Company announced that it was expanding its
existing share repurchase program by $100 million, which, together with the
remaining availability under its existing program, contemplates the repurchase
of an aggregate of approximately $103 million of Shares. In connection with
2
the expansion of the Company's share repurchase program, the Company announced
that each member of the Taubman family had entered into voting agreements with
the Company providing that any increase in the Taubman family's relative voting
power caused by a reduction in the Company's outstanding Shares would be voted
in a manner such that the share repurchase program would not affect the outcome
of any vote on matters the result of which would satisfy or frustrate any of the
conditions to the Offer.
On February 17, 2003, SPG and WEA announced that (i) 44,135,107 of the
52,207,756 Shares outstanding, representing approximately 85% of the Common
Stock, had been validly tendered and not withdrawn prior to 12:00 midnight New
York City time on February 14, 2003 and (ii) the expiration date of the Offer
was extended to 12:00 midnight New York City time on March 28, 2003.
Notwithstanding that approximately 85% of the Company's outstanding shares of
Common Stock had been tendered into the Offer as of February 14, 2003, on
February 17, 2003, two hours after SPG's and WEA's announcement of the
overwhelming results of the Offer, the Company announced that the Company Board
continued to oppose the Offer and would not take steps to facilitate the Offer.
On February 26, 2003, David Simon, Chief Executive Officer of SPG Inc., and
Peter Lowy, Chief Executive Officer of WEA, sent a letter to the independent
members of the Company Board inviting them to discuss actions that would
facilitate the completion of the Offer and solutions that would address the
conflicting interests of the holders of Common Stock and holders of The Taubman
Realty Group Limited Partnership ("Taubman L.P.") interests.
On February 27, 2003, SPG Inc. and WEA issued a press release indicating
their intention to seek an amendment to the Company's Restated Articles of
Incorporation (the "Charter") to allow satisfaction of the Excess Share
Condition (as defined below) at the Company's 2003 annual meeting of
shareholders (the "2003 Annual Meeting").
On March 4, 2003, the Company Board sent a letter to Messrs. Simon and Lowy
in which they acknowledged receipt of the February 26, 2003 letter and
reiterated their unanimous rejection of the Offer as not in the best interests
of the Company's shareholders.
On March 18, 2003, SPG Inc. and WEA issued a press release and open letter
to the shareholders of the Company announcing their intention to propose four
nominees (the "Purchaser Nominees") for election to the Company Board at the
2003 Annual Meeting.
On March 21, 2003, SPG Inc., the Purchaser and WEA filed a preliminary
proxy statement with the Commission relating to the election of the Purchaser
Nominees and the presentation of the Excess Share Proposal for approval at the
2003 Annual Meeting.
On March 28, 2003, SPG Inc. and the Purchaser submitted notice of the
nomination of the Purchaser Nominees and their intent to seek approval of the
Excess Share Proposal at the 2003 Annual Meeting to the Company's Secretary in
accordance with the By-Laws.
On March 31, 2003, SPG and WEA announced that as of 12:00 midnight, New
York City time, on March 28, 2003, approximately 40,302,385 Shares had been
tendered into the Offer and the expiration date of the Offer has been extended
to 12:00 midnight, New York City time, on May 30, 2003, unless further extended.
On April 24, 2003, the Company issued a press release announcing that the
Company Board had appointed Mr. Myron Ullman III to the Company Board seat
formerly held by A. Alfred Taubman prior to his resignation in December 2001 and
that Mr. Ullman would serve as a director in the class of directors to be
re-elected at the Company's 2005 annual meeting of shareholders.
3
On April 30, 2003, SPG requested permission to file a Third Amended
Complaint with the Court to challenge the Company Board's: (a) use of TCO's
share repurchase program to increase the relative voting power of the Taubman
family going into a contested election for board members; and (b) appointment on
April 24, 2003 of Myron Ullman III to the Company Board without a shareholder
vote. SPG and WEA believe that implementation of the TCO share repurchase
program is an improper use of shareholder funds designed to further entrench the
Taubman family, and that the effect of the share repurchase program contradicts
TCO's public pledge of February 10, 2003 not to increase the relative voting
power of the Taubman family on matters which would satisfy or frustrate any of
the conditions to the Offer. SPG and WEA believe the Company Board's appointment
of Mr. Ullman to the Company Board is invalid under the Charter, By-Laws, and
Michigan law. The result of this appointment is to deprive TCO shareholders
until 2005 of their right to fill the seat left vacant by A. Alfred Taubman in
December 2001.
On May 1, 2003, the Court issued an Opinion and Order, which was
subsequently superseded by an amended Opinion and Order (as so amended, the
"Opinion and Order") issued by the Court on May 8, 2003. The Opinion and Order
provides that, among other things, in November 2002 a "control share
acquisition" (within the meaning of Chapter 7B (the "Michigan Control Share
Act") of the Michigan Business Corporation Act (the "MBCA")) occurred when
Robert Taubman, the Taubman family and various associates of the Taubman family
acted to form a group voting position for the purpose of opposing the Offer,
made up of the shares of the Company's Series B Non-Participating Convertible
Preferred Stock, par value $.001 per share ("Series B Preferred Stock"), and
Common Stock held or controlled by members of the Taubman family and certain
associates of the Taubman family who had entered into voting agreements with
Robert Taubman (the "Voting Agreements") that together purportedly comprised
approximately 33.6% of the Company's voting power. The Court enjoined the voting
of these shares until voting rights are conferred on such shares through a
disinterested shareholder vote in compliance with the Michigan Control Share
Act.
The Court also found that the members of the Company Board breached their
fiduciary duties to the public shareholders by amending the By-Laws on December
20, 2002 to eliminate the shareholders' right to call a special meeting on a
date of their choosing. The Court held that the December 20 By-Laws
Amendments were a defensive measure designed to impede the Offer, and
improperly interfered with the Company shareholders' voting rights. As such,
the Court enjoined the Company Board from enforcing the December 20 By-Laws
Amendments, and reinstituted the By-Law provision as it existed prior to that
date. This ruling allows shareholders holding 25% of the Company's voting
securities to call a special meeting and set the date thereof without any
action by the Company Board. The Court dismissed, on procedural grounds,
SPG's claims that the Company Board and the Taubman family breached their
fiduciary duties by issuing the Series B Preferred Stock to the Taubman
family in 1998. The Court also required SPG to post a $10 million bond
pending the outcome of any appeal of the Opinion and Order. Additional
information on the Opinion and Order can be found under the heading "The
Tender Offer and Accompanying Litigation."
Also on May 1, 2003, in light of the relief granted in the Opinion and
Order, the Court denied SPG's motion to file the Third Amended Complaint with
the Court. SPG may in the future, however, again seek the Court's permission to
file the Third Amended Complaint with the Court.
On May 9, 2003, the Company, the Company Board and certain members of the
Taubman family named as defendants in the Complaint filed a notice of appeal
from the Opinion and Order. The Company, the Company Board and certain members
of the Taubman family also filed a motion in the Court to suspend the injunction
set forth in the Opinion and Order pending appeal to the United States Court of
Appeals for the Sixth Circuit. The motion is currently pending.
The purpose of this Solicitation is to facilitate the consummation of the
Offer by urging you to call a special meeting of shareholders of the Company for
the purposes described herein (the "Special Meeting").
4
At the Special Meeting, SPG and WEA will, among other things, ask you to
consider and vote upon a proposal to amend the Charter to provide that the
Excess Share Provision (as defined below) would not apply to SPG, WEA or their
respective affiliates (the "Excess Share Proposal"). The Excess Share Proposal
is described in detail under the heading "The Special Meeting - The Excess Share
Proposal." Additionally, SPG and WEA reserve the right to modify the Excess
Share Proposal or any other proposal of SPG and WEA and to cause additional
proposals to be identified in the notice of, and in the proxy materials for, the
Special Meeting. In addition, SPG and WEA expect to request authority to
initiate a vote for a proposal to recess, adjourn or reschedule the Special
Meeting for any reason, including to allow inspectors of the election to certify
the outcome of the vote on the Excess Share Proposal or any other proposal, and
to allow the solicitation of additional votes, if necessary, to approve the
Excess Share Proposal or any other proposals.
AS OF 12:00 MIDNIGHT ON FEBRUARY 14, 2003, APPROXIMATELY 85% OF THE
COMPANY'S OUTSTANDING COMMON STOCK HAD BEEN VALIDLY TENDERED INTO THE OFFER AND
NOT WITHDRAWN. NOTWITHSTANDING THIS OVERWHELMING MANDATE FROM THE COMPANY'S
COMMON SHAREHOLDERS, ON FEBRUARY 17, 2003, TWO HOURS AFTER SPG'S AND WEA'S
ANNOUNCEMENT OF THE RESULTS OF THE OFFER, THE COMPANY ANNOUNCED THAT THE COMPANY
BOARD CONTINUED TO OPPOSE THE OFFER AND WOULD NOT TAKE STEPS TO FACILITATE THE
OFFER. THE COMPANY BOARD HAS A FIDUCIARY DUTY TO ACT IN THE BEST INTERESTS OF
THE COMPANY'S COMMON SHAREHOLDERS, WHO OWN APPROXIMATELY 99% OF THE ECONOMIC
VALUE OF THE COMPANY. AS DIRECTORS OF A PUBLIC COMPANY, THE MEMBERS OF THE
COMPANY BOARD SHOULD NOT ABDICATE THEIR FIDUCIARY OBLIGATIONS BY HIDING BEHIND
THE DICTATES OF ANY PARTICULAR GROUP OF SHAREHOLDERS, PARTICULARLY SHAREHOLDERS
(LIKE THE TAUBMAN FAMILY) WITH INTERESTS DIVERGENT FROM THOSE OF THE COMPANY'S
COMMON SHAREHOLDERS.
Two-thirds (2/3) of the voting power of the Company's voting
securities is needed to approve the Excess Share Proposal. In the Opinion
and Order, the Court held that the shares of Series B Preferred Stock and
Common Stock held by members of the Taubman family and certain associates
of the Taubman family that together purportedly comprised approximately
33.6% of the Company's voting power cannot be voted until voting rights are
conferred on such shares through a disinterested shareholder vote in
compliance with the Michigan Control Share Act. Accordingly, based on
50,908,965 shares of Common Stock and 31,784,842 shares of Series B
Preferred Stock issued and outstanding as of April 28, 2003, and 11,000
shares of Common Stock owned by SPG as of the date of this Solicitation
Statement, and excluding 26,784,060 shares of Series B Preferred Stock and
1,386,021 shares of Common Stock subject to the Opinion and Order that are
held or controlled by the Taubman family and certain associates of the
Taubman family, the approval of the Excess Share Proposal requires the
affirmative vote of the holders of 36,338,151 shares of Common Stock and
Series B Preferred Stock on a combined basis.
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. An amendment to the Schedule TO (which includes the Supplement)
relating to the Offer was filed by SPG and WEA with the Commission on January
16, 2003. 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.
5
Shares are only being sought for tender by means of and pursuant to the
terms of the Offer to Purchase, the Supplement and the related revised Letter of
Transmittal, as filed by SPG and WEA with the Commission as exhibits to the
Schedule TO on December 5, 2002 and on January 16, 2003, respectively.
THE COMPANY BOARD HAS REPEATEDLY REJECTED THE $20.00 PER SHARE OFFER AND
HAS STATED THAT THE TAUBMAN FAMILY IS CATEGORICALLY OPPOSED TO A SALE OF THE
COMPANY. IF YOU BELIEVE THAT YOU (AND NOT THE TAUBMAN FAMILY) SHOULD DECIDE THE
FUTURE OF YOUR COMPANY AND THAT YOU SHOULD HAVE THE OPPORTUNITY TO RECEIVE
$20.00 PER SHARE IN CASH FOR ALL OF YOUR SHARES OF COMMON STOCK, SPG AND WEA
URGE 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 OF COMMON STOCK PURSUANT TO THE OFFER OR OBLIGATE YOU TO
TENDER YOUR SHARES OF COMMON STOCK PURSUANT TO THE OFFER. YOU MUST SEPARATELY
TENDER YOUR SHARES OF COMMON STOCK PURSUANT TO THE OFFER TO PURCHASE, THE
SUPPLEMENT AND THE REVISED LETTER OF TRANSMITTAL IF YOU WISH TO PARTICIPATE IN
THE OFFER.
THE TENDER OFFER AND ACCOMPANYING LITIGATION
The purpose of the Offer is for SPG and WEA to acquire control of, and
ultimately all the Common Stock of, the Company. If the Offer is consummated,
SPG and WEA currently intend, 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 its
designated assignee) pursuant to which each then outstanding Share (other than
Shares held by the Purchaser, SPG Inc., WEA or their respective 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, the Supplement and the related
revised Letter of Transmittal, copies of which are available upon request from
the Information Agent for the Offer, MacKenzie Partners, Inc. ("MacKenzie
Partners"), at the telephone numbers and address listed on the back cover of
this Agent Designation Solicitation Statement. 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.
SPG and WEA are seeking to negotiate with the Company with respect to the
combination of the Company with the Purchaser. SPG and WEA are 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 on mutually acceptable terms to be agreed to by the
parties whereby such holders could 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 and/or securities of certain affiliates of WEA. Although they are open
to discussing various transactions with the holders of such limited partnership
units, none of SPG, Inc., WEA nor the Purchaser has made or is making an offer
to exchange such securities for any securities at this time. Any such offer
would only be made in accordance with applicable securities laws. Holders of
interests in Taubman L.P. and the
6
Company's Series A and Series B Preferred Stock are not eligible to receive the
Offer Price or other consideration in connection with the Offer. 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 and/or
securities of SPG Inc., or its affiliates or certain affiliates of WEA in such
amounts as are negotiated by SPG Inc., WEA and the Company.
The Offer is conditioned upon, among other conditions set forth in the
Offer to Purchase and the Supplement, (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., WEA or any of
their respective subsidiaries, at least two-thirds (2/3) of the total voting
power (as described in the Offer to Purchase and the Supplement) 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, Chapter 7A of the MBCA (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. or WEA) (the "Business Combination Condition").
On December 11, 2002, the Company filed the Company Schedule 14D-9 with the
Commission announcing that the Company Board had implemented the December 10
By-Laws Amendments. The December 10 By-Laws Amendments included an amendment to
opt out of the Michigan Control Share Act and made certain other changes,
including requiring advance notice for shareholder nominations and proposals.
Accordingly, SPG and WEA believe that, as of the current date, the Control Share
Condition has been satisfied. Notwithstanding the foregoing, SPG and WEA believe
there is a possibility that the Company could, through a further amendment to
the By-Laws, opt into the Michigan Control Share Act. If the Company, through a
further amendment to the 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.
In the Company Schedule 14D-9, the Company disclosed, among other things,
that the requirements of the Michigan Business Combination Act do not currently
apply to it. As a result, SPG and WEA believe that, as of the current date, the
Business Combination Condition is satisfied. Nonetheless, in the Company
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, becomes subject to the requirements of the Michigan
Business Combination Act, the Business Combination Condition will need to be
satisfied, and continue to be satisfied, before the Offer can be consummated.
The Offer is also subject to other terms and conditions described in the
Offer to Purchase, the Supplement and the related revised 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 May 30, 2003,
unless the Offer is extended.
7
In the Company Schedule 14D-9, the Company recommended that the Company's
common shareholders reject the Offer. The recommendation was made despite the
fact that the Offer Price at that time represented 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). 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.
On January 15, 2003, SPG Inc. and WEA announced that SPG Inc., WEA and the
Purchaser had entered into the Offer Agreement and that WEA had joined in the
Offer under and on the terms of the Offer Agreement. On that same day, SPG Inc.
issued a press release announcing that the Offer Price was increased to $20.00,
that the expiration date of the Offer was extended to February 14, 2003, and
that unless two-thirds (2/3) of the outstanding Common Stock, or 34,805,171
Shares (based on the number of Shares outstanding as of December 16, 2002), were
tendered and not withdrawn prior to midnight on February 14, 2003, SPG Inc. and
WEA would withdraw the Offer and terminate their efforts to acquire the Company.
On January 21, 2003, the Company filed an amendment to 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 $20.00
per Share Offer Price represents a 50% 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 and WEA do not believe that the Company's
recommendation is in the best interests of the Company's common shareholders
because SPG and WEA believe the Company's common shareholders should be given
the opportunity to decide for themselves whether to tender their Shares and
receive $20.00 per Share in cash pursuant to the Offer.
On February 17, 2003, SPG and WEA announced that (i) 44,135,107 of the
52,207,756 Shares outstanding, representing approximately 85% of the Common
Stock, had been validly tendered and not withdrawn prior to 12:00 midnight New
York City time on February 14, 2003 and (ii) the expiration date of the Offer
was extended to 12:00 midnight New York City time on March 28, 2003.
Notwithstanding that approximately 85% of the Company's outstanding shares of
Common Stock had been tendered into the Offer as of February 14, 2003, on
February 17, 2003, two hours after SPG's and WEA's announcement of the results
of the Offer, the Company announced that the Company Board continued to oppose
the Offer and would not take steps to facilitate the Offer.
On February 26, 2003, David Simon, Chief Executive Officer of SPG Inc., and
Peter Lowy, Chief Executive Officer of WEA, sent a letter to the independent
members of the Company Board inviting them to discuss actions that would
facilitate the completion of the Offer and solutions that would address the
conflicting interests of the holders of Common Stock and holders of Taubman L.P.
On February 27, 2003, SPG Inc. and WEA issued a press release indicating
their intention to seek an amendment to the Company's Charter to allow
satisfaction of the Excess Share Condition at the 2003 Annual Meeting.
On March 4, 2003, the Company Board sent a letter to Messrs. Simon and Lowy
in which they acknowledged receipt of the February 26, 2003 letter and
reiterated their unanimous rejection of the Offer as not in the best interests
of the Company's shareholders.
8
On March 21, 2003, SPG Inc., the Purchaser and WEA filed a preliminary
proxy statement with the Commission relating to, among other matters, the
presentation of the Excess Share Proposal for approval at the 2003 Annual
Meeting.
On March 28, 2003, SPG Inc. and the Purchaser submitted notice of, among
other things, their intent to seek approval of the Excess Share Proposal at the
2003 Annual Meeting to the Company's Secretary in accordance with the By-Laws.
On March 31, 2003, SPG and WEA announced that as of 12:00 midnight, New
York City time, on March 28, 2003, approximately 40,302,385 Shares had been
tendered into the Offer and the expiration date of the Offer had been extended
to 12:00 midnight, New York City time, on May 30, 2003, unless further extended.
On May 1, 2003, the Court issued the Opinion and Order. The Opinion and
Order provides that, among other things, in November 2002 a "control share
acquisition" (within the meaning of the Michigan Control Share Act) occurred
when Robert Taubman, the Taubman family and various associates of the Taubman
family acted to form a group voting position for the purpose of opposing the
Offer, made up of the shares of the Series B Preferred Stock and Common Stock
held by members of the Taubman family and certain associates of the Taubman
family that together purportedly comprised approximately 33.6% of the
Company's voting power. The Court enjoined the voting of these shares until
voting rights are conferred on such shares through a disinterested
shareholder vote in compliance with the Michigan Control Share Act. The Court
also found that the members of the Company Board breached their fiduciary
duties to the public shareholders by amending the By-Laws on December 20,
2002 to eliminate the shareholders' right to call a special meeting on a date
of their choosing. The Court held that the December 20 By-Laws Amendments
were a defensive measure designed to impede the Offer, and improperly
interfered with the Company shareholders' voting rights. As such, the Court
enjoined the Company Board from enforcing the December 20 By-Laws Amendments,
and reinstituted the By-Law provision as it existed prior to that date. This
ruling allows shareholders holding 25% of the Company's voting securities to
call a special meeting and set the date thereof without any action by the
Company Board. The Court dismissed, on procedural grounds, SPG's claims that
the Company Board and the Taubman family breached their fiduciary duties by
issuing the Series B Preferred Stock to the Taubman family in 1998. The Court
also required SPG to post a $10 million bond pending the outcome of any
appeal of the Opinion and Order.
On May 9, 2003, the Company, the Company Board and certain members of the
Taubman family named as defendants in the Complaint filed a notice of appeal
from the Opinion and Order. The Company, the Company Board and certain members
of the Taubman family also filed a motion in the Court to suspend the injunction
set forth in the Opinion and Order pending appeal to the United States Court of
Appeals for the Sixth Circuit. The motion is currently pending.
SPG AND WEA BELIEVE THAT THE COMPANY BOARD, ACTING AS FIDUCIARIES FOR THE
COMMON SHAREHOLDERS, COULD AND SHOULD ENTER INTO NEGOTIATIONS WITH SPG AND WEA
RELATING TO A BUSINESS COMBINATION IN ORDER TO ALLOW THE HOLDERS OF SHARES THE
OPPORTUNITY TO RECEIVE $20.00 PER SHARE IN CASH. SPG AND WEA BELIEVE THAT THE
TAUBMAN FAMILY ALSO HAS FIDUCIARY DUTIES TO THE COMMON SHAREHOLDERS OF THE
COMPANY AND SHOULD NOT DENY COMMON SHAREHOLDERS THE OPPORTUNITY TO RECEIVE
$20.00 PER SHARE IN CASH FOR THEIR SHARES.
9
While SPG and WEA would prefer that the Company Board and the Taubman
family take actions to facilitate the Offer, SPG and WEA have also themselves
undertaken 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 in the Court. Among
other things, the Complaint sought 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 asserted in the Complaint that the defendants are
violating Michigan law by engaging in conduct that is designed to impede the
Offer and injure shareholders. On December 30, 2002, SPG filed the First Amended
Complaint with the Court against the Company, the Company Board and certain
members of the Taubman family which, among other things, challenged the validity
of the December 20 By-Laws Amendments.
The Complaint challenged 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 issuing, in
violation of its fiduciary duties, shares of Series B Preferred Stock to the
Taubman family, which purported to increase the Taubman family's combined voting
power in the Company from less than 1% to over 30%, and (iii) that Robert
Taubman and the Taubman family, acting in concert with other shareholders of the
Company, had formed a "group" to acquire 33.6% of the voting power in the
Company and that such an acquisition constitutes a "control share acquisition"
under the Michigan Control Share Act, which required the approval of the holders
of a majority of the disinterested shares of the Company's voting stock for such
shares to have voting rights.
In general, the Michigan Control Share Act relates to the acquisition by
any person or group of voting power over voting shares of a Michigan corporation
that would increase the voting power of such person or group to or above
one-fifth (1/5), one-third (1/3) or a majority of the total voting power of all
the voting shares of the corporation. Under the Michigan Control Share Act, the
shares acquired in such a "control share acquisition" only have voting rights if
a resolution granting full voting rights to those shares is approved by a
majority of the corporation's disinterested shareholders.
Through the Complaint, SPG sought, among other things, (i) a declaration
that the Series B Preferred Stock and the other shares purportedly 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
the shares held or controlled by it, 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
other shares purportedly held or controlled by it to veto the Offer and deny the
holders of the Common Stock the ability to receive $20.00 per Share in cash for
their Shares. The Taubman family's 1% economic stake includes Common Stock and
Series B Preferred Stock owned by the Taubman family and is calculated on an "as
converted" basis at the fixed conversion ratio of 14,000 shares of Series B
Preferred Stock to one share of Common Stock.
On January 22, 2003, the Court issued an opinion and order (the "January 22
Order") denying in part, and granting in part, the Company and the other
defendants' motion to dismiss Count I of the Complaint. In the January 22 Order,
the Court held that the issuance in 1998 of the Series B Preferred Stock by the
Company to the Taubman family was not a "control share acquisition" under the
Michigan Control Share Act. However, the Court also ruled that the Taubman
family's purported blocking position in the Company could be challenged by SPG
at the hearing held on March 21, 2003 on the grounds that the Taubman family's
"group" voting power was obtained without shareholder approval under the
Michigan Control Share Act.
10
On February 5, 2003, SPG filed the Second Amended Complaint with the Court
against the Company, the Company Board and certain members of the Taubman
family. The Second Amended Complaint included amendments to add Mr. Randall J.
Smith, a holder of Common Stock, as a plaintiff and to update information
regarding the Offer to reflect certain changes to the Offer since the filing of
the First Amended Complaint.
On April 30, 2003, SPG requested permission to file a Third Amended
Complaint with the Court to challenge the Company Board's: (a) use of the TCO
share repurchase program to increase the relative voting power of the Taubman
family going into a contested election for board members; and (b) appointment on
April 24, 2003 of Myron Ullman III to the Company Board without a shareholder
vote. SPG and WEA believe that implementation of the TCO share repurchase
program is an improper use of shareholder funds designed to further entrench the
Taubman family, and that the effect of the share repurchase program contradicts
TCO's public pledge of February 10, 2003 not to increase the relative voting
power of the Taubman family on matters which would satisfy or frustrate any of
the conditions to the Offer. SPG and WEA believe the Company Board's appointment
of Mr. Ullman to the Company Board is invalid under the Charter, By-laws and
Michigan law. The result of this appointment is to deprive TCO shareholders
until 2005 of their right to fill the seat left vacant by A. Alfred Taubman in
December 2001.
On May 1, 2003, the Court issued the Opinion and Order. The Opinion and
Order provides that, among other things, in November 2002 a "control share
acquisition" (within the meaning of the Michigan Control Share Act) occurred
when Robert Taubman, the Taubman family and various associates of the Taubman
family acted to form a group voting position for the purpose of opposing the
Offer made up of the Series B Preferred Stock and Common Stock held or
controlled by members of the Taubman family and certain associates of the
Taubman family that together purportedly comprised approximately 33.6% of the
Company's voting power. The Opinion and Order granted in part and denied in
part SPG Inc., the Purchaser and Randall J. Smith's motion for a preliminary
injunction, and granted in part and denied in part the Company's motion to
dismiss the Second Amended Complaint. The Opinion and Order dismissed Randall
J. Smith from the suit because of a lack of jurisdiction over his claims and
dismissed for lack of standing SPG Inc. and the Purchaser's claims
challenging the Company's 1998 issuance of the Series B Preferred Stock. The
Court held that SPG Inc. and the Purchaser did not have standing to challenge
actions relating to the 1998 issuance because neither entity owned shares of
the Company at that time. The Court also dismissed those claims alleging
breaches of fiduciary duty based on the Company Board's rejection of the
Offer.
However, the Court found in favor of SPG Inc. and the Purchaser and
granted the relief sought, based on their other claims. First, the Court
found that the members of the Company Board breached their fiduciary duties
to the public shareholders by amending the By-Laws on December 20, 2002 to
eliminate the shareholders' right to call a special meeting on a date of
their choosing. The Court held that the December 20 By-Laws Amendment was a
defensive measure designed to impede the Offer, and improperly interfered
with the Company shareholders' voting rights. As such, the Court enjoined the
enforcement of the December 20 By-Laws Amendments and reinstituted the
provision as it existed prior to that date. Pursuant to the By-Laws and this
ruling, shareholders holding 25% of the Company's voting securities have the
ability to call a special meeting and set the date thereof without any action
by the Company Board.
The Court also found that the Taubman family and various associates of
the Taubman family who entered into the Voting Agreements formed a "group"
that intended to "aggregate" their shares of Common Stock and Series B
Preferred Stock in order to oppose the Offer. This aggregation gave the
Taubman family voting power in excess of that allowed by the Michigan Control
Share Act without a shareholder vote conferring voting rights on those
"control shares." Having so found, the Court enjoined the voting of these
aggregated shares until voting rights are conferred on them through a
disinterested shareholder vote
11
in compliance with the Michigan Control Share Act. The Court also required
SPG to post a $10 million bond pending the outcome of any appeal of the
Opinion and Order.
Also on May 1, 2003, in light of the relief granted in the Opinion and
Order, the Court denied SPG's motion to file the Third Amended Complaint with
the Court. SPG may in the future, however, again seek the Court's permission to
file the Third Amended Complaint with the Court.
On May 9, 2003, the Company, the Company Board and certain members of the
Taubman family named as defendants in the Complaint filed a notice of appeal
from the Opinion and Order. The Company, the Company Board and certain members
of the Taubman family also filed a motion in the Court to suspend the injunction
set forth in the Opinion and Order pending appeal to the United States Court of
Appeals for the Sixth Circuit. The motion is currently pending.
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.
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.
12
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.
13
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
14
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
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:
15
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
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%.
16
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.
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 16, 2002, SPG Inc. and the Purchaser filed a preliminary proxy
statement with the Commission relating to the solicitation of agent designations
from the Company's shareholders to provide for the calling of a special meeting
of the Company's shareholders and also filed an amendment to the Schedule TO
announcing that certain conditions to the Offer, based on information disclosed
by the Company in the Company Schedule 14D-9, had been satisfied as of that
date.
17
In January 2003, SPG Inc. and WEA held discussions concerning the terms on
which WEA might participate in the Offer. These negotiations culminated in the
execution on January 15, 2003 by SPG Inc., WEA and the Purchaser of the Offer
Agreement, pursuant to which the parties agreed, among other things, that WEA
would participate in the Offer if it were successful by acquiring 50% of the
Purchaser for a purchase price equal to 50% of the aggregate Offer Price paid by
the Purchaser in the Offer.
On January 15, 2003, SPG Inc. and WEA announced that SPG Inc., WEA and the
Purchaser had entered into the Offer Agreement and that WEA had joined in the
Offer under and on the terms of the Offer Agreement. On that same day, SPG Inc.
issued a press release announcing that the Offer Price was increased to $20.00,
that the expiration date of the Offer was extended to February 14, 2003, and
that unless two-thirds (2/3) of the outstanding Common Stock, or 34,805,171
Shares (based on the number of Shares outstanding as of December 16, 2002), were
tendered and not withdrawn prior to midnight on February 14, 2003, SPG Inc. and
WEA would withdraw the Offer and terminate their efforts to acquire the Company.
On February 17, 2003, SPG and WEA announced that (i) 44,135,107 of the
52,207,756 Shares outstanding, representing approximately 85% of the Common
Stock, had been validly tendered and not withdrawn prior to 12:00 midnight New
York City time on February 14, 2003 and (ii) the expiration date of the Offer
was extended to 12:00 midnight New York City time on March 28, 2003.
Notwithstanding that approximately 85% of the Company's outstanding shares of
Common Stock had been tendered into the Offer as of February 14, 2003, on
February 17, 2003, two hours after SPG's and WEA's announcement of the
overwhelming results of the Offer, the Company announced that the Company Board
continued to oppose the Offer and would not take steps to facilitate the Offer.
On February 26, 2003, David Simon, Chief Executive Officer of SPG Inc., and
Peter Lowy, Chief Executive Officer of WEA, sent a letter to the independent
members of the Company Board inviting them to discuss actions that would
facilitate the completion of the Offer and solutions that would address the
conflicting interests of the holders of Common Stock and holders of Taubman L.P.
On March 4, 2003, the Company Board sent a letter to Messrs. Simon and Lowy
in which they acknowledged receipt of the February 26, 2003 letter and
reiterated their unanimous rejection of the Offer as not in the best interests
of the shareholders.
On March 18, 2003, SPG Inc. and WEA issued a press release and open letter
to the shareholders of the Company announcing their intention to propose the
Purchaser Nominees for election to the Company Board at the 2003 Annual Meeting.
On March 21, 2003, SPG Inc., the Purchaser and WEA filed a preliminary
proxy statement with the Commission relating to the presentation of the Excess
Share Proposal for approval at the 2003 Annual Meeting and the election of the
Purchaser Nominees.
On March 28, 2003, SPG Inc. and the Purchaser submitted notice of the
nomination of the Purchaser Nominees and their intent to seek approval of the
Excess Share Proposal at the 2003 Annual Meeting to the Company's Secretary in
accordance with the By-Laws.
On March 31, 2003, SPG and WEA announced that as of 12:00 midnight, New
York City time, on March 28, 2003, approximately 40,302,385 Shares had been
tendered into the Offer and the expiration date of the Offer has been extended
to 12:00 midnight, New York City time, on May 30, 2003, unless further extended.
18
AGENT DESIGNATION PROCEDURES
Pursuant to this Solicitation Statement, SPG and WEA are soliciting GREEN
Agent Designation cards ("Agent Designations") from the holders of outstanding
shares of Common Stock and Series B Preferred Stock entitled to vote at a
meeting of shareholders to provide for the calling of 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 consistent with the Opinion and Order (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 (as defined below) 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 or shares of Series B Preferred Stock 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. If SPG and WEA obtain sufficient Agent
Designations to call the Special Meeting or if the circuit court in Oakland
County, Michigan orders that the Special Meeting be called and held, SPG and WEA
would 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.
Executed Agent Designations should be delivered, by fax or by mail (using
the enclosed envelope), to the Information Agent for the Offer, MacKenzie
Partners for delivery to the Company, on or before __________, 2003 or such
later date as SPG and WEA may from time to time establish. If executed Agent
Designations from the Requisite Holders are received by SPG and WEA prior to
__________, 2003, SPG and WEA may call the Special Meeting at such time.
The record date for determining which shareholders are entitled to call the
Special Meeting and submit Agent Designations shall be the first date on which
Agent Designations are submitted to (i) the Company to call the Special Meeting
or to request that the Special Meeting be called or (ii) 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.
As a result of the Opinion and Order, SPG and WEA believe that no action by
the Company Board is required to convene the Special Meeting because the Opinion
and Order enjoins the enforcement of the December 20 By-Laws Amendments. As a
result, the procedures for calling a special meeting are governed by the By-Laws
in effect prior to the December 20 By-Laws Amendments, which provide that record
holders of not less than 25% of the outstanding shares of the Company's capital
stock entitled to vote (the "Requisite Holders") may themselves call the Special
Meeting without any action by the Company Board. 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-K, as amended by Form 10-K/A, for the year
ended December 31, 2002, the Company Schedule 14D-9 and Amendment No. 1 to the
Company's Preliminary Proxy Revocation Solicitation Statement on Schedule 14A,
filed on February 25, 2003 (the "Preliminary Revocation Solicitation
Statement"), as of April 28, 2003 there were issued and outstanding (i)
50,908,965 shares of Common Stock, (ii) 31,784,842 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 (with any resulting fractional shares to be redeemed for
cash),
19
(iii) 7,202,785 partnership units of Taubman L.P. which have rights of
conversion into 7,202,785 shares of Common Stock of the Company, and (iv)
options to purchase 1,580,007 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 Taubman L.P. (whether upon exercise of an
option or otherwise) is also entitled to receive a share of Series B Preferred
Stock for a purchase price of $.001 per share. According to the Charter and
except as otherwise provided in the Opinion and Order, 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.
Pursuant to the Opinion and Order the entire purported 33.6% voting
stake held or controlled by the Taubman family and certain associates of the
Taubman family, comprised of 26,784,060 shares of Series B Preferred Stock
and 1,386,021 shares of Common Stock subject to the Opinion and Order, have
been enjoined from voting until such time as the Company's disinterested
shareholders confer voting rights on such shares in accordance with the
Michigan Control Share Act. Accordingly, as of April 28, 2003, 49,522,944
shares of the issued and outstanding Common Stock and 5,000,782 shares of the
issued and outstanding Series B Preferred Stock, or, on a combined basis,
54,523,726 shares of Company's capital stock, are currently eligible to vote
in connection with this Agent Designation and the Special Meeting.
After giving effect to the Opinion and Order, Agent Designations from
holders of at least (A) 13,619,932 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 and (B) 5,441,373 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 the 49,522,944 shares of Common Stock and 5,000,782 shares of
Series B Preferred Stock currently eligible to vote.
Under the terms of the By-Laws in effect prior to the enjoined December 20
By-Laws Amendments, the Company's shareholders, not the Company Board, have the
right to call the Special Meeting, to be held between 10 and 60 days after
providing notice of the Special Meeting.
Following receipt of Agent Designations from the Requisite Holders or the
receipt of an order from the circuit court of Oakland County, Michigan (the
"Circuit Court") ordering that the Special Meeting be called and held, the
Designated Agents would call the Special Meeting and fix the date and time of
the Special Meeting or call the Special Meeting at such time and place
designated in the order of the Circuit Court. Shortly thereafter, SPG and WEA
would 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.
You may revoke your Agent Designation at any time prior to the earlier of
__________, 2003 or the date on which SPG and WEA submit Agent Designations from
the Requisite Holders to the Company, by delivering a written revocation to SPG
and WEA, 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 the brokerage firm, bank nominee or other institution
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 and WEA urge you to confirm in
writing your instructions to the person responsible for your account and to
provide a copy of such instructions to SPG and WEA, care of MacKenzie Partners,
at the address or
20
fax number set forth on the back cover of this Solicitation Statement so that
SPG and WEA 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 AND WEA,
YOU ARE NOT COMMITTING TO CAST ANY VOTE IN FAVOR OR AGAINST, NOR ARE YOU
GRANTING ANY PROXY TO VOTE ON, ANY PROPOSAL 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 CALLING OF THE SPECIAL MEETING, YOU WILL ALLOW THE
COMPANY'S SHAREHOLDERS TO DIRECTLY REMOVE IMPEDIMENTS TO THE OFFER SO THAT
HOLDERS OF COMMON STOCK WILL HAVE THE OPPORTUNITY TO RECEIVE $20.00 PER SHARE
CASH FOR THEIR SHARES OF COMMON STOCK.
THE SPECIAL MEETING
GENERAL
SPG and WEA are furnishing this Solicitation Statement and an 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
provide for the calling of 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 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 or
apply to the Circuit Court, to order, for good cause shown, that the Special
Meeting be called and held. The By-Laws provide that the shareholders calling
the special meeting have the right to set a date for such meeting and to give
notice thereof. If a special meeting is ordered by the Circuit Court to be
called and held, the order may designate the time and place of such meeting.
After the Special Meeting has been called, SPG and WEA will solicit proxies
from you in support of the proposals to be voted upon at the Special Meeting,
including the Excess Share Proposal and any other proposals to be voted on at
the Special Meeting, by sending you a proxy statement and a proxy card for use
therewith. Under the By-Laws and Section 415 of the MBCA, the presence of
holders of shares as of the record date entitled to cast a majority of the votes
at the Special Meeting, in person or by proxy, will constitute a quorum for
conducting business at the Special Meeting.
THE EXCESS SHARE PROPOSAL
If SPG and WEA are successful in this 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 and
21
WEA expect to present the Excess Share Proposal for a shareholder vote at the
Special Meeting. The purpose of the Excess Share Proposal is to remove an
impediment to the consummation of the Offer.
The Excess Share Proposal contemplates an amendment to the provisions of
Article III, Section 2, Subsection (d) of the Charter (the "Excess Share
Provision") to provide that the Excess Share Provision would not apply to SPG,
WEA or their respective affiliates. 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 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. SPG and WEA believe that consummation of the
Offer would not jeopardize the Company's status as a REIT because none of SPG
Inc., the Purchaser or WEA 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 to permit the Excess Share
Condition to be satisfied.
The Excess Share Proposal requires Two-Thirds Shareholder Approval of the
49,522,944 shares of Common Stock and 5,000,782 shares of Series B Preferred
Stock eligible to vote, or 36,338,151 shares of Common Stock and Series B
Preferred Stock on a combined basis, after giving effect to the Opinion and
Order described above and SPG's ownership of 11,000 shares of Common Stock as of
the date of this Solicitation Statement.
RECESS OR ADJOURNMENT OF MEETING AND OTHER MATTERS
SPG and WEA expect to request, in the proxy solicitation relating to the
Special Meeting, authority (i) to initiate and vote for proposals to recess,
adjourn or reschedule the Special Meeting for any reason,
22
including to allow inspectors of the election to certify the outcome of the
Excess Share Proposal and any other proposals to be voted upon at the Special
Meeting, or to allow the solicitation of additional votes, if necessary, to
approve the Excess Share Proposal and any other proposals to be voted upon at
the Special Meeting and (ii) to oppose and vote against any proposal to recess,
adjourn or reschedule the Special Meeting for any reason. Additionally, SPG and
WEA reserve the right to modify the Excess Share Proposal or any other proposal
of SPG and WEA and to cause additional proposals to be identified in the notice
of, and in the proxy materials for, the Special Meeting. 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.
IF THE SPECIAL MEETING IS CALLED, YOU WILL BE FURNISHED WITH NOTICE OF THE
SPECIAL MEETING AND PROXY MATERIALS RELATING TO THE EXCESS SHARE PROPOSAL AND
ANY OTHER PROPOSALS TO BE VOTED UPON AT THE SPECIAL MEETING.
THESE PROXY MATERIALS WILL CONTAIN MORE DETAILED INFORMATION CONCERNING THE
EXCESS SHARE PROPOSAL AND ANY OTHER PROPOSALS TO BE VOTED UPON AT THE SPECIAL
MEETING.
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 the Purchaser, SPG Inc., WEA, their
respective 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,
has received any representations from the Company regarding any information
contained in such documents or records or the completeness or accuracy of any
such information, and none of the Purchaser, SPG Inc., WEA, their respective
affiliates, Merrill Lynch, MacKenzie Partners or Computershare generally has
access to a means of obtaining independently verified information, or themselves
verifying any such information, concerning the Company. None of the Purchaser,
SPG Inc., WEA, their respective affiliates, Merrill Lynch, MacKenzie Partners or
Computershare 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 the
Purchaser, SPG Inc., WEA, their respective affiliates, Merrill Lynch, MacKenzie
Partners or Computershare, except to the extent required by law.
According to its Form 10-K for the year ended December 31, 2002, the
Company was incorporated in the State of Michigan in 1973 and shares of the
Company were first issued to the public in 1992 and 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 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.
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
23
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., THE PURCHASER
AND WEA IN THE SOLICITATION
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 241
income-producing properties in the United States, which consist of regional
malls, community shopping centers, specialty retail centers and 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.
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 free of 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 SPG Inc. are available for
inspection at the offices of the NYSE located at 20 Broad Street, New York, New
York 10005.
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 the solicitation of proxies from the Company's shareholders.
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.
As of the date of this Solicitation Statement, SPG Inc. and the Purchaser
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
24
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.
WEA is a real estate investment trust specializing in enclosed shopping
centers. WEA has interests in 63 major shopping centers in the United States
branded as "Westfield Shoppingtowns." WEA's portfolio of Westfield Shoppingtowns
includes clusters of shopping centers in major markets in the East Coast,
Midwest and West Coast. WEA has shopping centers in 14 states, comprising 64.0
million square feet of retail space. WEA's principal executive offices are
located at 11601 Wilshire Boulevard, 12th Floor, Los Angeles, California 90025,
and its telephone number is (310) 478-4456.
WEA is controlled by Westfield America Trust, an Australian publicly traded
unit trust. Westfield America Trust is listed on the Australian Stock Exchange
and is currently the second largest property trust listed on the Australian
Stock Exchange. Westfield America Trust's sole investment is a 74.7% economic
interest in WEA. Westfield America Management Limited ("WAML") is the
responsible entity and trustee of Westfield America Trust. WAML is a wholly
owned subsidiary of Westfield Holdings Limited, an Australian company listed on
the Australian Stock Exchange.
WEA 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.
As of the date of this Solicitation Statement, WEA did not own any Shares.
See Schedule I for a list of directors and executive officers of SPG Inc.
and WEA who may assist MacKenzie Partners in soliciting proxies from the
Company's shareholders.
SOLICITATION EXPENSES AND PROCEDURES
Agent Designations may be solicited by mail, telephone, facsimile,
electronic mail and in person. Solicitations may be made by directors, officers,
investor relations personnel and other employees of SPG, WEA or their respective
affiliates, none of whom will receive additional compensation for such
solicitations. SPG and WEA have 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 and WEA 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.
The entire expense of soliciting Agent Designations for the Special Meeting
is being borne by SPG and WEA. SPG and WEA 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
25
expected to be approximately $700,000. Total costs incurred to date in
furtherance of or in connection with this Solicitation are approximately
$200,000.
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. Merrill Lynch is also acting as
exclusive financial advisor to WEA in connection with the Offer. WEA has agreed
to indemnify Merrill Lynch and certain related persons against certain
liabilities and expenses, including liabilities under the federal securities
laws. At any time, Merrill Lynch and its affiliates may actively trade the debt
and equity securities of SPG Inc., WEA and their respective 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., WEA and their
respective 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., WEA and their respective 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, employees and representatives of SPG
Inc., WEA and their respective 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 OFFER IS BEING MADE ONLY BY
MEANS OF AND PURSUANT TO THE TERMS OF THE OFFER TO PURCHASE, THE SUPPLEMENT AND
THE RELATED REVISED LETTER OF TRANSMITTAL, AS FILED WITH THE COMMISSION.
26
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:
Simon Property Group, Inc.
Simon Property Acquisitions, Inc.
Westfield America, 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.
WESTFIELD AMERICA, INC.
May __, 2003
27
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. 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.................................. 75 Director
Melvyn E. Bergstein......................... 61 Director
G. William Miller........................... 78 Director
J. Albert Smith, Jr......................... 62 Director
Pieter S. van den Berg...................... 57 Director
Philip J. Ward.............................. 54 Director
Linda Walker Bynoe.......................... 50 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.......................... 53 President, Chief Operating Officer and Director
Fredrick W. Petri........................... 56 Director
M. Denise DeBartolo York.................... 52 Director
Gary L. Lewis............................... 44 Executive Vice President - Leasing
Stephen E. Sterrett......................... 47 Executive Vice President - Chief Financial Officer
John Rulli.................................. 46 Executive Vice President and Chief Administrative Officer
J. Scott Mumphrey........................... 51 Executive Vice President - Property Management
James M. Barkley............................ 51 General Counsel and Secretary
Andrew A. Juster............................ 50 Senior Vice President and Treasurer
Shelly J. Doran............................. 44 Vice President - Investor Relations
I-1
INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF WEA
The following table sets forth the name of each director and executive
officer of WEA who may also assist MacKenzie Partners in soliciting proxies from
the Company's shareholders. Each person's business address is c/o Westfield
America, Inc., 11601 Wilshire Boulevard, 12th Floor, Los Angeles, California
90025. None of the officers, directors or employees of WEA 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 WEA
NAME AGE TITLE
- ---- --- -----
Peter S. Lowy.............................. 44 Director; President and Chief Executive Officer
Richard E. Green........................... 61 Director; Vice Chairman of Operations
Mark A. Stefanek........................... 49 Director; Chief Financial Officer and Treasurer
Peter R. Schwartz.......................... 43 Senior Executive Vice President
Dimitri Vazelakis.......................... 49 Executive Vice President
John Schroder.............................. 39 Executive Vice President
Randall J. Smith........................... 53 Executive Vice President
Roger D. Burghdorf......................... 55 Executive Vice President
I-2
OTHER REPRESENTATIVES OF SPG INC. AND WEA
WHO MAY BE DEEMED TO BE SOLICITING PROXIES
Although Merrill Lynch does not admit that it or any of its directors,
officers, employees or affiliates is a "participant," as defined in Schedule 14A
promulgated by the Commission under the Exchange Act, or that Schedule 14A
requires the disclosure of certain information concerning them, the following
employee of Merrill Lynch may communicate with shareholders in a manner that
could be deemed to be assisting SPG Inc. and WEA in soliciting proxies from the
Company's shareholders. The principal business address of the Merrill Lynch
employee named below is 4 World Financial Center, New York, NY 10080.
NAME AGE TITLE
- ---- --- -----
Martin J. Cicco............................ 47 Managing Director
I-3
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 or Series B Preferred Stock. Such information is derived
from (i) Amendment No. 1 to the Preliminary Revocation Solicitation Statement
filed on February 25, 2003 (the "Preliminary Revocation Solicitation
Statement"), (ii) the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 (the "2002 Annual Report"), (iii) the Schedule 13D of Robert
S. Taubman and the other reporting persons listed therein, filed on January 18,
2000, amended by an Amendment No. 1 to Schedule 13D, dated November 14, 2002 and
an Amendment No. 2 to Schedule 13D, dated January 28, 2003 (the "Taubman Family
Schedule 13D"), (iv) the Amendment to the 2002 Annual Report on Form 10-K/A
filed on April 29, 2003 (the "2002 Annual Report Amendment") and (v) the Company
Schedule 14D-9. All percentages set forth below are based on 50,908,965 shares
of Common Stock and 31,784,842 shares of Series B Preferred Stock outstanding as
of April 28, 2003, in each case based on the 2002 Annual Report Amendment.
According to the Charter, the Series B Preferred Stock generally votes with
the Common Stock on all matters. According to the Company's public filings, the
31,784,842 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.
In the Opinion and Order, the Court enjoined the voting of the shares of
the Company's Series B Preferred Stock and Common Stock held or controlled by
members of the Taubman family and certain associates of the Taubman family that
together purportedly comprised approximately 33.6% of the Company's voting power
until voting rights are conferred on such shares through a disinterested
shareholder vote in compliance with the Michigan Control Share Act. The Company,
the Company Board and certain members of the Taubman family named as defendants
in the Complaint have filed a notice of appeal from the Opinion and Order. The
Company, the Company Board and certain members of the Taubman family also filed
a motion in the Court to suspend the injunction set forth in the Opinion and
Order pending appeal to the United States Court of Appeals for the Sixth
Circuit. The motion is currently pending.
Based on information reported in or based on the 2002 Annual Report
Amendment and the Preliminary Revocation Solicitation Statement, SPG and WEA
believe 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 7,202,785 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 2002 Annual Report,
the 2002 Annual Report Amendment and the Company Schedule 14D-9, SPG and WEA
believe there are options to purchase 1,580,007 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.
Shares of
Series B
Shares of Preferred
Name and Common Stock Stock Percent of Total Shares
Address of Beneficially Percent of Beneficially Series B Beneficially Percent of
Beneficial Owner Owned Common Stock Owned Preferred Stock Owned Total Shares
- ---------------------------------------------------------------------------------------------------------------------
A. Alfred Taubman 186,937 (1) * 24,582,057 (2) 77.3% 24,768,994 30.0%
II-1
Shares of
Series B
Shares of Preferred
Name and Common Stock Stock Percent of Total Shares
Address of Beneficially Percent of Beneficially Series B Beneficially Percent of
Beneficial Owner Owned Common Stock Owned Preferred Stock Owned Total Shares
- ---------------------------------------------------------------------------------------------------------------------
1820 S. Ocean
Blvd.
South Palm Beach,
Florida 33480
Morgan Stanley,
Dean Witter, & Co.
Morgan Stanley
Dean Witter Asset
Management, Inc.
1585 Broadway New
York, NY 10036 5,323,742 (3) 10.5% 0 N/A 5,323,742 6.4%
Security Capital
Group Incorporated
Security Capital
Research
Management
Incorporated 11
South LaSalle
Suite 200
Chicago, IL 60603 5,002,220 (4) 9.8% 0 N/A 5,002,220 6.0%
LaSalle
Investment
Management, Inc.
LaSalle
Investment
Management
(Securities),
L.P. 200 East
Randolph Drive
Chicago, Illinois
60601 4,253,350 (5) 8.4% 0 N/A 4,253,350 5.1%
Cohen & Steers
Capital
Management, Inc.
757 Third Avenue
New York, NY 10017 3,216,375 (6) 6.3% 0 N/A 3,216,375 3.9%
Deutsche Bank AG
Taunusanlage 12,
D-60325 Frankfurt
am Main Federal
Republic of
Germany 3,169,974 (7) 6.2% 0 N/A 3,169,974 3.8%
II-2
- ----------
* less than 1%
(1) Based on information set forth in the 2002 Annual Report Amendment,
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, except as limited by the Opinion and Order, 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 Annual Report Amendment, 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.
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 Annual Report Amendment, 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 Annual Report Amendment, 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 87,028 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 87,028 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 two years remaining in
the original five-year vesting period. Because, according to the 2002
Annual Report Amendment, 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 24,768,994 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 (a) the 2002 Annual Report Amendment,
held on behalf of various investment advisory clients, none of which holds
more than 5% of the Common Stock and (b) Amendment No. 8 to Schedule 13G,
dated February 18, 2003.
(4) Based on information set forth in (a) the 2002 Annual Report Amendment and
(b) Amendment No. 1 to Schedule 13G, dated February 13, 2003.
(5) Based on information set forth in the 2002 Annual Report Amendment,
includes ownership of Common Stock on behalf of Stichting Pensioenfonds
Voor de Gezondheid Geestelijke en Maatschappelijke Belangen.
(6) Based on information set forth in (a) the 2002 Annual Report Amendment and
(b) Amendment No. 7 to Schedule 13G, dated February 3, 2003.
II-3
(7) Based on information set forth in (a) the 2002 Annual Report Amendment and
(b) Schedule 13G, dated February 10, 2003.
II-4
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
Preliminary Revocation Solicitation Statement, (ii) the 2002 Annual Report,
(iii) the Taubman Family Schedule 13D, (iv) the 2002 Annual Report Amendment and
(v) the Company Schedule 14D-9. Unless otherwise noted, all percentages set
forth below are based on 50,908,965 shares of Common Stock and 31,784,842 shares
of Series B Preferred Stock outstanding as of April 28, 2003, in each case based
on the 2002 Annual Report Amendment.
According to the Charter, the Series B Preferred Stock generally votes with
the Common Stock on all matters. According to the Company's public filings, the
31,784,842 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.
In the Opinion and Order, the Court enjoined the voting of the shares of
the Company's Series B Preferred Stock and Common Stock held or controlled by
members of the Taubman family and certain associates of the Taubman family that
together purportedly comprised approximately 33.6% of the Company's voting power
until voting rights are conferred on such shares through a disinterested
shareholder vote in compliance with the Michigan Control Share Act. The Company,
the Company Board and certain members of the Taubman family named as defendants
in the Complaint have filed a notice of appeal from the Opinion and Order. The
Company, the Company Board and certain members of the Taubman family also filed
a motion in the Court to suspend the injunction set forth in the Opinion and
Order pending appeal to the United States Court of Appeals for the Sixth
Circuit. The motion is currently pending.
Based on information reported in or based on the 2002 Annual Report
Amendment and the Preliminary Revocation Solicitation Statement, SPG and WEA
believe 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 7,202,785 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 2002 Annual Report,
the 2002 Annual Report Amendment and the Company Schedule 14D-9, SPG and WEA
believe there are options to purchase 1,580,007 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.
Shares of
Shares of Series B
Common Percent Preferred Percent
Stock of Stock of Series B Total Shares Percent
Beneficially Common Beneficially Preferred Beneficially of Total
Name and Address of Beneficial Owner Owned Stock Owned Stock Owned Shares
- -------------------------------------------------------------------------------------------------------------------------------
Robert S. Taubman 2,170,772(1) 4.2% 26,714,806(2) 84.0% 28,885,578(3) 34.6%
William S. Taubman 543,259(4) 1.1% 5,925(5) * 549,184 *
III-1
Lisa A. Payne 608,328(6) 1.2% 0 n/a 608,328 *
Courtney Lord 2,034(7) * 280,125(8) * 282,159 *
John L. Simon 5,191(9) * 0 n/a 5,191 *
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 *
Directors and Executive Officers as a Group 2,972,755 5.8% 26,994,931 84.9% 29,967,686 35.9%
- ----------
* less than 1%
(1) Based on information set forth in the 2002 Annual Report Amendment and the
Taubman Family Schedule 13D and after giving effect to the Court's Opinion
and Order, includes shares held or controlled by the Taubman Family and the
shares subject to the Voting Agreements consisting of: A) 885,560 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) 527,759 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) 512,437 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 2002 Annual Report Amendment and
Taubman Family Schedule 13D, consists of 1,555,178 shares of Series B
Preferred Stock subject, in the aggregate, to the Voting Agreements that
were purportedly terminated on January 28, 2003 and 25,159,628 shares of
Series B Preferred Stock held by the Taubman Family.
(3) Based on information set forth in the Preliminary Revocation Solicitation
Statement and the Taubman Family Schedule 13D, the Voting Agreements that
were purportedly terminated on January 28, 2003 provided that Mr. R.
Taubman has the sole and absolute right to vote 885,560 shares of Common
Stock and 1,555,178 shares of Series B Preferred Stock. After giving effect
to the Court's Opinion and Order, includes shares held or controlled by the
Taubman family and the shares subject to the Voting Agreements. As set
forth in the 2002 Annual Report Amendment, the Taubman Family holds 512,437
shares of Common Stock (excluding the 245,016 and 527,759 presently vested
options (each of which entitles the holder thereof to purchase one
III-2
Unit which, in turn, is convertible into one share of Common Stock) granted
to Mr. R. Taubman and Mr. W. Taubman, respectively) and 25,159,628 shares
of Series B Preferred Stock. Including the vested options referred to
above, the percentage of total shares would be 34.6% (calculated based on
50,908,965 shares of Common Stock and 31,784,842 shares of Series B
Preferred Stock outstanding as of April 28, 2003).
(4) Based on information set forth in the 2002 Annual Report Amendment and the
Taubman Family Schedule 13D, consists of 527,759 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") and 15,500 shares
of Common Stock owned by his children and for which Mr. W. Taubman
disclaims any beneficial interest. According to the 2002 Annual Report
Amendment, excludes 300,000 shares of Common Stock held by R&W and all
shares 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 Annual Report Amendment,
excludes 565,721 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 Annual Report Amendment, excludes all shares 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 Annual Report Amendment,
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 Annual Report Amendment,
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 Annual Report Amendment,
consists of 280,125 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 Annual Report Amendment, does not
include 87,028 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 no
voting or dispositive power.
(9) Based on information set forth in the 2002 Annual Report Amendment,
consists of 2,000 shares of Common Stock that Mr. Simon owns and 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 Annual Report Amendment,
excludes 15,000 shares of Series A Cumulative Redeemable Stock ("Series A
Preferred Stock") owned by Mr. Chazen and 30,000 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 Annual Report Amendment,
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 Annual Report Amendment, 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 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 the
Purchaser, SPG Inc., WEA or their respective affiliates has received any
representations from the Company regarding any information contained in such
documents or records or the completeness or accuracy of any such information,
and none of the Purchaser, SPG Inc., WEA or their respective affiliates
generally has access to a means of obtaining independently verified information,
or themselves verifying any such information, concerning the Company. None of
the Purchaser, SPG Inc., WEA or their respective affiliates takes 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 the Purchaser, SPG Inc., WEA or their respective
affiliates, except to the extent required by law.
III-4
IMPORTANT
Your action is important! No matter how many shares you own, please give
SPG and WEA 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 of Common Stock or Series B Preferred Stock 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 of Common Stock
or Series B Preferred Stock, 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
III-5
[GREEN AGENT DESIGNATION CARD]
AGENT DESIGNATION
TO SHAREHOLDERS OF TAUBMAN CENTERS, INC.
THIS AGENT DESIGNATION IS SOLICITED BY SIMON PROPERTY GROUP INC., SIMON
PROPERTY ACQUISITIONS, INC. AND WESTFIELD AMERICA, INC. FOR THE APPOINTMENT OF
DESIGNATED AGENTS TO PROVIDE FOR THE CALLING OF A SPECIAL MEETING OF THE
SHAREHOLDERS OF TAUBMAN CENTERS, INC. THIS AGENT DESIGNATION IS NOT BEING
SOLICITED BY THE BOARD OF DIRECTORS 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 provide for the calling of (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
Excess Share Proposal as described in the Solicitation of Agent
Designations of Simon Property Group, Inc., Simon Property
Acquisitions, Inc. and Westfield America, Inc., and any other
proposals to be voted on at the Special Meeting;
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) PROVIDING FOR THE CALLING OF 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.
