Simon Property Completes $3.4B Taubman Acquisition; Street Says Hold

US commercial real estate company, Simon Property Group has announced the completion of its acquisition of Taubman Centers, shortly after receiving shareholder approval for the merger.

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Simon Property Group (SPG) announced, “it has completed its acquisition of an 80% ownership interest in The Taubman Realty Group Limited Partnership (TRG).” In addition, Simon paid $43 a share for Taubman Centers. Further, the company said, “the Taubman family sold approximately one-third of its ownership interest at the transaction price and remains a 20% partner in TRG.”

The total consideration of the deal stood at approximately $3.4 billion and was financed with Simon’s existing liquidity, including the proceeds of its recently completed equity offering, the company said.

Simon’s CEO David Simon commented, “We are very pleased to complete this transaction and to add some of the world’s premier retail assets to our portfolio.” He added that “This investment will enhance the ability of TRG to establish innovative retail environments for consumers and to create new job prospects for the communities in which it operates.” (See SPG stock analysis on TipRanks)

On Dec. 2, Argus Research analyst Angus Ferguson downgraded the stock to Hold from Buy. The analyst said that even though Simon has recovered from its March lows and its properties have reopened, the brick-and-mortar retail space is still facing challenges including shopping at crowded stores and intense competition from online retailers.

The stock scores an analyst consensus of a Hold based on 5 Holds and 1 Sell. The average price target of $81 implies downside potential of about 2.8% to current levels. Shares have declined by about 44.1% year-to-date.