================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
Schedule 14D-9/A
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 6)
--------------------
TAUBMAN CENTERS, INC.
(Name of Subject Company)
TAUBMAN CENTERS, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
876664103
(CUSIP Number of Class of Securities)
---------------------
LISA A. PAYNE
TAUBMAN CENTERS, INC.
200 EAST LONG LAKE ROAD
SUITE 300, P.O. BOX 200
BLOOMFIELD HILLS, MICHIGAN 48303
(248) 258-6800
(Name, Address and Telephone Number of Person Authorized to Receive Notice and
Communications on Behalf of the Person(s) Filing Statement)
--------------------
WITH COPIES TO:
CYRIL MOSCOW JEFFREY H. MIRO ADAM O. EMMERICH
HONIGMAN MILLER SCHWARTZ AND KENNETH H. GOLD TREVOR S. NORWITZ
COHN, LLP MIRO, WEINER & KREIMER ROBIN PANOVKA
2290 FIRST NATIONAL BUILDING 38500 WOODWARD AVENUE, WACHTELL, LIPTON, ROSEN
660 WOODWARD AVENUE SUITE 100 & KATZ
DETROIT, MICHIGAN 48226-3583 BLOOMFIELD HILLS, 51 WEST 52ND STREET
(313) 465-7000 MICHIGAN 48303 NEW YORK, NEW YORK 10019
(248) 646-2400 (212) 403-1000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
================================================================================
This Amendment No. 6 amends and supplements the Solicitation/
Recommendation Statement on Schedule 14D-9 initially filed with the Securities
and Exchange Commission (the "Commission") on December 11, 2002 (as subsequently
amended, the "Schedule 14D-9"), by Taubman Centers, Inc., a Michigan corporation
(the "Company" or "Taubman Centers") relating to the tender offer made by Simon
Property Acquisitions, Inc. ("Offeror"), a wholly owned subsidiary of Simon
Property Group, Inc. ("Simon"), as set forth in a Tender Offer Statement filed
by Simon on Schedule TO, dated December 5, 2002 (the "Schedule TO"), to pay
$18.00 net to the seller in cash, without interest thereon, for each Common
Share, upon the terms and subject to the conditions set forth in the Schedule
TO. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Schedule 14D-9.
ITEM 3. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
(a) ARRANGEMENTS WITH EXECUTIVE OFFICERS AND DIRECTORS OF TAUBMAN CENTERS
The Schedule 14D-9 is amended to include the following statement at the end of
the first paragraph of Item 3(a) on page 1:
Mr. Robert S. Taubman and Mr. William S. Taubman, both of whom
are directors and executive officers of the Company
beneficially own (including through voting proxies) in the
aggregate 2,114,973 shares of Series B Preferred Stock which
represents 6.7% of the outstanding Series B Preferred Stock,
Courtney Lord owns 193,095 or less than 1% of the outstanding
Series B Preferred Stock and none of the other directors or
executive officers beneficially own any Series B Preferred
Stock. The Taubman Family beneficially owns (including through
voting proxies) in the aggregate 26,784,060 shares of Series B
Preferred Stock which represents 84.3% of the outstanding
Series B Preferred Stock.
The Schedule 14D-9 is further amended to insert the following new section into
Item 3(a) on page 6 after the section entitled "Indemnification" and before the
section entitled "Rights of the Holders of Series B Preferred Stock":
1998 RESTRUCTURING
In 1998, stimulated by the desire of a major investor
in Taubman Centers (two General Motors pension funds) to
structure their very significant exposure to regional malls in
a manner more consistent with the size of their overall
investment and the Company's desire to simplify its corporate
structure to make it more like the comparable UPREITs which
went public after the Company, the Company engaged in a
restructuring. This restructuring had three essential
elements: (i) the General Motors pension funds exchanged their
Operating Partnership interests for direct ownership of mall
properties, thus decreasing the number of outstanding units
and increasing proportionately the share of the public and the
Taubman family; (ii) the Partnership Committee of the
Operating Partnership which had previously been the principal
governing body of the Taubman Centers business was dissolved;
and (iii) the voting rights of the Taubman family and other
operating part-
nership unit-holders were proportionately moved up to the
REIT level pursuant to an arrangement negotiated between the
partnership unit-holders and the Company Board of Directors
(which was represented by independent financial and legal
advisors). To effectuate this shift of governance, the
unit-holders were issued a new series of voting Series B
Preferred Stock at the Company level in exchange for their
right to guaranteed seats on the TRG Partnership Committee and
certain other rights. See "Rights of the Holders of Series B
Preferred Stock."
As a result of the restructuring the public
shareholders went from an approximate 38% interest (held
indirectly through the corporate parent) in the Operating
Partnership to a 63% interest in the Operating Partnership,
and the Taubman family increased its share from an approximate
19% interest to an approximate 28% interest.
Prior to the 1998 restructuring, the partners of the
Operating Partnership, including the Taubman family, pursuant
to the partnership agreement of the Operating Partnership, had
the right to appoint a number of members of the partnership
committee along with other governance rights at the
partnership and property management levels. They relinquished
these and other rights in consideration for a voting interest
in Taubman Centers proportional to their economic ownership in
the consolidated enterprise. The directors of Taubman Centers,
who had the benefit of independent counsel and financial
advisors, unanimously approved the restructuring, thus
determining that the consideration provided in exchange for
the issuance of the Series B shares was fair and appropriate.
The New York Stock Exchange also acknowledged that this was
not an issuance requiring shareholder approval and that the
transaction was consistent with the Exchange's policy against
disenfranchising shareholders. Under applicable law, the
issuance of the Series B shares required as a technical matter
the payment of a nominal amount of cash for the shares
(similar to a par value requirement).
One effect of the 1998 restructuring was to align the
interests of the holders of Units (including the Taubman
Family) with the holders of publicly traded shares, so that
the voting interests and economic interests of all holders
would be equivalent. From an economic perspective, if Taubman
Centers were to completely liquidate its assets (including the
assets of the Operating Partnership, its controlled
affiliate), the Taubman family would be legally entitled to
approximately 30.6% of the proceeds. Income generated by the
Operating Partnership is distributed to the Company and the
Unitholders in proportion to their interests and the Taubman
Family is entitled to approximately 30.6% of these
distributions. Similarly, from a voting perspective the
Taubman Family through the Series B Preferred Stock has the
ability to cast 30.6% of the voting power of the Company (in
addition Robert Taubman has been granted proxies with respect
to another 3% of the voting power). Thus, the voting interests
and economic ownership of all investors in the Taubman Centers
business are perfectly aligned.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(c) REASONS FOR THE RECOMMENDATION
The Schedule 14D-9 is amended to replace the first paragraph of Item 4(c) on
page 14 with the following:
The Taubman Centers Board of Directors, after consultation with its
senior management, legal and financial advisors reached the conclusion
that the Offer is not in the best interest of the Company's
shareholders and offered the recommendation described above, for the
following reasons:
The Schedule 14D-9 is amended to amend and restate in their entirety the
following reasons for the recommendation, each subparagraph set forth below
replacing the corresponding subparagraph in the Schedule 14D-9:
(i) The Board's familiarity with the business of the Company,
its financial condition, results of operations and prospects and the
nature of, the prospects for, and the Company's position in, the
industry in which the Company operates, and the Board's belief that for
the reasons further explained under paragraphs (iii) and (v), neither
the Company's current stock price nor the offer reflect the full value
of the Company's assets.
. . .
(v) The fact that Taubman Centers has delivered more than an
80% total return to shareholders over the past five years, during which
time the Company has outperformed the Morgan Stanley REIT Total Return
Index (which returned 21.6%), the S&P 500 Total Return Index (which
returned 4.3%), and many of its competitors (including Simon Property
Group, which returned 63.3%). The Taubman Centers properties have the
highest average sales and rents per square foot of any regional mall
company. Based on these facts, the Board believes that the offer does
not reflect the full value of the Company's assets.
. . .
(viii) The Board's belief that Simon's public relations
campaign aimed at damaging the Company is hypocritical and concern
about Simon's misleading statements to the public about its own
corporate governance in its press releases and Form 8-K filed on
November 18, 2002. The Board noted the fact that Simon claimed in a
press release that "the Simon family has no veto power or other control
mechanism that could block a sale or merger transaction." In a story
published in The New York Times on December 1, 2002, Simon admitted the
untruth of its statement, calling it "a mistake" and noting that the
family does in fact have the power to block a merger and that to date
Simon has not issued a correction and maintained this incorrect press
release on its website. In addition, the Board took note of Simon's
willingness to mischaracterize Taubman Centers' financial performance
and to misrepresent David Simon's communications with Robert Taubman.
The Board believes that these misstatements may be indicative of a
larger
compliance problem in the Simon organization, which calls into question
both Simon's representations and its ability to consummate a
transaction along the lines it has proposed.
(ix) The fact that completion of the Offer and second-step
merger will likely be a taxable event to many of the Company's
shareholders, the timing of which will not be in their individual
control. Accordingly, the Board believes that many shareholders would
actually receive less in net proceeds than purported to be offered by
Simon, which offer in itself the Board has determined to be inadequate.
The Schedule 14D-9 is amended to replace in its entirety the penultimate
paragraph of Section 4(c) with the following two paragraphs:
In addition, in arriving at their recommendation, the directors of the
Company were aware of the interests of certain officers and directors
of the Company as described under "Interests of Certain Persons." The
directors of the Company were also aware that the Taubman Family's
voting power is derived primarily from its ownership of Series B
Preferred Stock and that Simon has challenged the issuance of the
Series B Preferred Stock and is seeking to disenfranchise the Series B
shareholders; however, the Board believes this litigation to be without
merit.
In making its determination that the Offer is not in the best interests
of Taubman Centers and Taubman Centers' shareholders, the Board took
into account that the realization of the Company's anticipated future
results is not assured, and that there is a risk that the Company's
plans, like the plans of any business, will not be successfully
completed. If the Company remains independent, its shareholders will
continue to bear this risk.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
(a) LEGAL MATTERS
The Schedule 14D-9 is amended by replacing in its entirety the last paragraph of
Item 8(a) on page 19 with the following:
By-law Amendments. On December 10, 2002, the Company's Board
of Directors amended the By-laws of the Company in order to
opt out of the Michigan Control Share Acquisitions Act and to
make certain other procedural changes. These changes provide
that a shareholder who wishes to nominate directors or bring
business before a shareholder meeting must give the Company
timely notice in writing of that business or nomination and
provide specified information concerning their proposal, and
that only business specified in the notice of the meeting or
at the direction of the board of directors will be conducted
at a special meeting of shareholders. The By-law changes also
clarified the fact that no notice of the time and place of any
adjourned meetings be given except as required by law, and
added more detailed provisions regarding the delivery and
waiver of any notice to the shareholders or the board.
On December 20, 2002, the Board of Directors further amended
the By-laws of the Company to specify the timing and
procedures that would apply to a special meeting requested by
the shareholders. Under the Company's By-laws a holder or
holders of more than 25% of the voting power of the Company's
outstanding shares can cause a special meeting to be
convened. Under the changes adopted by the Board of Directors
on December 20, 2002, that are designed to provide an orderly
process for the calling of such a meeting upon shareholder
request, a shareholder or shareholders desiring to call a
special meeting of the shareholders must send the Company a
notice requesting that the Company establish a record date and
a meeting date for such a special meeting. This notice must be
accompanied by documentation evidencing that the shareholder
or shareholders requesting the meeting possess sufficient
voting power to request that such a special meeting be called,
This notice must also contain specified information regarding
the shareholder and the proposals to be considered at the
meeting. Within ten business days after receipt of such notice
and verification of the accompanying documentation, the Board
will fix a record date and meeting date for the special
meeting, which meeting date shall be set for not less than 30
nor more than 90 days after the date of such Board action.
Prior to these additional changes the By-laws did not specify
the procedure or timing for calling a special meeting, and
were not clear as to the role of the Company's Board in
determining when and where such a meeting would be held. It is
possible that as a result of these By-law amendments, a
special meeting called at the request of Company shareholders,
which under the revised By-law must be set for between 30 and
90 days from the date the Board calls the meeting, may be
earlier or later than desired by the shareholders requesting
the meeting.
(c) FORWARD-LOOKING STATEMENTS
The Schedule 14D-9 is amended to include the following statement at the end of
Item 8(c) on page 20:
Notwithstanding any statement in this Schedule 14D-9 or in any
press release Taubman Centers has filed herewith or
incorporated herein by reference, Taubman Centers acknowledges
that the safe harbor for forward-looking statements under
Section 21E of the Securities Exchange Act of 1934, as
amended, added by the Private Securities Litigation Reform Act
of 1995, does not apply to forward-looking statements made in
connection with a tender offer.
ITEM 9. EXHIBITS
Item 9 is hereby amended and supplemented by adding thereto the following:
EXHIBIT NO. DESCRIPTION
__________ ___________
Exhibit (a)(23) Document distributed to employees of Taubman
Centers, Inc.
Exhibit (a)(24) Additional slide for website presentation
entitled "The 1998 Restructuring of Taubman:
Setting the Record Straight," as posted on the
Taubman Centers, Inc. Website on January 13, 2003
SIGNATURE
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: January 13, 2003 Taubman Centers, Inc.
By: /s/ Robert S. Taubman
-----------------------------------
Robert S. Taubman
Chairman of the Board, President and
Chief Executive Officer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
__________ ___________
Exhibit (a)(23) Document distributed to employees of Taubman
Centers, Inc.
Exhibit (a)(24) Additional slide for website presentation
entitled "The 1998 Restructuring of Taubman:
Setting the Record Straight," as posted on the
Taubman Centers, Inc. Website on January 13, 2003