Piper Sandler Upgrades Taubman On Merger Agreement

Following long negotiations, Taubman Centers, Inc. (NYSE: TCO) announced it has agreed to a merger with Simon Property Group Inc (NYSE: SPG) for $43 per share.

Shareholders of Taubman Centers are likely to be happy with this announcement, which comes ahead of a scheduled Nov. 16 court hearing, according to Piper Sandler.

The Taubman Centers Analyst: Alexander Goldfarb upgraded Taubman Centers from Underweight to Neutral and raised the price target from $20 to $43.

The Taubman Centers Thesis: Although the agreed price is below the original $52.50 per share, the family will retain a 20% stake in the acquired entity, Goldfarb said in the note.

The closing has been pushed until late 2020 or early 2021, which is “better timed for the economic recovery,” the analyst said.

“For TCO, the outcome is better than we would have expected, as shareholders get cashed out at a valuation well in excess of current Mall multiples, while the company avoids protracted litigation,” he said. 

TCO Price Action: Shares of Taubman Centers were up 8.41% at $42.80 at the close Monday