Why Elliott's Taubman Exit Could Hurt Land & Building's Cause

Activist investor Elliott Management has liquidated or is liquidating its stake in Taubman Centers, Inc. TCO, according to The Deal. The move could be a “major blow” to fellow activist Jonathan Litt’s Land & Buildings Investment Management and its proxy fight against the company.

Taubman shares were trading down as much as 6.4 percent midday Monday following the news before recovering slightly to close down 4.47 percent at $53.24. 

Taubman had no comment in response to an inquiry by Benzinga.

The Proxy Fight Until Now

Taubman was first targeted by Land & Buildings in October 2016, when the fund began pressuring the company to cut costs or consider going private. In June 2017, Litt failed to replace Taubman Chairman and CEO Robert Taubman and lead director Myron Ullman III.

Since then, Litt has issued a series of open letters to the company’s board of directors. The letters have ranged in sharpness from emphasizing poor performance relative to peers to a demand that the company's dual-class voting structure be eliminated. The structure grants the Taubman family 30-percent voting power despite holding just 2 percent of the common stock.

Most recently, Litt has put himself forward for election to the board.

Elliott first disclosed its 3.8-percent stake in Taubman in November 2017, per a Bloomberg report. The fund was widely perceived to be a major ally for Land & Buildings, but has largely kept its engagements with the company out of public view.

It's unclear why Elliott has decided to exit its position. Taubman has beat consensus earnings estimates for the past two quarters, although shares are down 18 percent year-to-date. Neither Elliott nor Land & Buildings were immediately available for comment.

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