(Bloomberg) — Simon Property Group Inc. is terminating its $3.6 billion bid to buy Taubman Centers Inc., arguing that its rival mall owner has breached the merger agreement by not taking steps to mitigate the fallout from the coronavirus pandemic.Simon said in a statement on Wednesday it has “exercised its contractual rights” to terminate the deal, which was announced in February before the pandemic battered malls. The company said it was asking a court to declare that Taubman has suffered a “material adverse event” and “breached the covenants in the merger agreement.”Taubman didn’t immediately respond to a request for comment.Taubman’s shares plunged more than 40% to $26.70 after the statement was released. Its shares have been trading below the proposed deal price of $52.50 for months, raising speculation that the deal was in trouble.Simon also dipped on Wednesday, dropping as much as 4.5% to $82.57. Its shares had rallied recently on hopes for a faster than expected economic recoveryProspects for bricks-and-mortar retail have changed dramatically since the deal was announced. Stay-at-home orders to curb the spread of Covid-19 have shuttered stores, pushing consumers deeper into online shopping.Landlords, already pressured by declining foot traffic and retailer bankruptcies, may face a wave of new vacancies as the pandemic forces more tenants out of business.For months, analysts and industry observers have speculated that Simon would seek to get a lower price for a deal that was announced weeks before the U.S. economy was shuttered by the pandemic, which has been particularly hard on malls and retailers.The move by Simon on Wednesday could be a renegotiating tactic, according to Lindsay Dutch, an analyst at Bloomberg Intelligence.“If Taubman’s stock drops by a certain amount, maybe they would try to go renegotiate,” Dutch said.While Americans stuck inside for months have shown a willingness to return to stores, there are major challenges ahead for enclosed malls.Simon argued in the statement that Taubman had failed to make “essential cuts” in operating expenses and capital expenditures and that the company’s properties have been hit particularly hard by the outbreak.“Taubman’s significant proportion of enclosed retail properties located in densely populated major metropolitan areas, dependence on both domestic and international tourism at many of its properties, and its focus on high-end shopping have combined to impact Taubman’s business disproportionately due to the Covid-19 pandemic when compared to the rest of the retail real estate industry,” Simon said.(Adds quote from analyst.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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It isn't hard to find love when there's no competition. Match Group Inc (NASDAQ: MTCH) is the only online dating service on the public markets, but last resort or not, it's found itself a mate.The Rating: Morgan Stanley analysts Lauren Cassel and Brian Nowak initiated coverage on Match with and Overweight rating and a $103 price target.The Thesis: Lockdown was a lonely experience for many single Americans. A lifting of their forced solitude may inspire a rush to the apps."We see a long and growing runway for growth given demographic tailwinds and greater adoption of online dating," the analysts wrote, citing a global addressable market of about 600 million with 3.5% compound annual growth.The coronavirus impetus compounds other favorable trends for dating apps, including a peak in the U.S. single population, an increase in young daters as a proportion of the single population, and the continued global penetration of internet and smartphone access.Overall, Morgan Stanley anticipates 13% subscriber growth over the next five years, with Match nearly doubling its global payer penetration driven by international subscriptions."We view MTCH as a must-own structural grower in early innings with dominant market share," Cassel and Nowak wrote. "As singles crave human interaction in a post COVID world, we model accelerating 2021 sub growth."MTCH Price Action: At the time of publication, Match traded down marginally around $89.Related Links:Study: More Harassment Seen In LGBT Online Dating9 Countries Using Online Dating The MostPhoto courtesy of Tinder.Latest Ratings for MTCH DateFirmActionFromTo Jun 2020Morgan StanleyInitiates Coverage OnOverweight May 2020CitigroupMaintainsBuy May 2020BMO CapitalMaintainsMarket Perform View More Analyst Ratings for MTCH View the Latest Analyst Ratings See more from Benzinga * BofA Upgrades Occidental, Downgrades Chevron * This 5M Malibu Property Includes A Decked-Out Cabana And Recording Studio * 6 Slack Analysts On Q1 Results, Billing Numbers, Microsoft Competition: 'An Unexpected Dichotomy'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.