- Oops!Something went wrong.Please try again later.
(Reuters) - Simon Property Group Inc <SPG.N>, the biggest U.S. mall operator, will cut its purchase price for an 80% stake of rival Taubman Centers Inc <TCO.N> by 18%, both companies said on Sunday, as the coronavirus upends the retail industry sector.
The agreed discount comes as the two companies settled a legal dispute over the transaction, which Simon had previously threatened to walk away from, citing the hit to the industry from COVID-19.
Under the revised terms, Simon will pay $2.65 billion for the 80% stake in the Taubman Realty Group (TRG), cutting its offer price to $43 per share in cash from $52.50 originally announced in February.
The Taubman family will sell about one-third of its ownership interest at the transaction price, leaving them with a 20% stake in TRG, the companies added.
The companies said they also have settled their pending litigation in a Michigan court over the merger and the companies expect the deal to close later this year or early next year.
Simon, which runs shopping chains such as the Woodbury Common Premium Outlets in New York, said in June it was abandoning the deal.
Simon said at that time the coronavirus outbreak had "disproportionately hurt" Taubman's malls given their location in densely populated metropolitan areas and reliance on tourism.
Online shopping growth had already slashed foot traffic at brick-and-mortar retail stores and the pandemic has only accelerated that trend.
Simon also said Taubman did not cut costs to mitigate the impact of the pandemic.
Taubman had said Simon's termination of the deal was without merit and filed a lawsuit rejecting Simon's allegations.
(Reporting by Rama Venkat in Bengaluru; Editing by Sam Holmes and Diane Craft)