Michigan leaders are coming to the aid of hometown REIT Taubman Centers in its efforts to fend off a hostile takeover bid from Simon Property Group and Westfield America. Thanks to support from the state government, Taubman may not even have to wait for its appeal on District Judge Victoria Roberts' recent ruling, which declared the Taubman family's B-Class shares, which provide veto power over the Simon/Westfield takeover, invalid.
A corporate governance bill passed the Michigan House of Representatives last week that would overturn Judge Victoria Robert's decision. According to Morgan Stanley analyst Matthew Ostrower, the bill allows for the provision of controlling groups of common shares that would retroactively allow the Taubman family to have created their 33.6 percent group.
Though the bill must still pass in the Senate, the vote's 77 to 27 margin in the House indicates it could very well happen, Ostrower says in a report. And according to The Detroit Free Press, the governor of Michigan has voiced support for the bill.
Simon and Westfield are awaiting the outcome in the Senate. The two REITs are hoping the Senate will feel the bill would make it too easy to take over Michigan corporations, Ostrower says. But, "if the bill becomes a law, Simon and Westfield appear fully committed to fighting a proxy battle for seats on the Taubman board. The results of this battle are likely to be very close."