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PROSPECTUS SUPPLEMENT RULE 424(B)(5)
(TO PROSPECTUS DATED SEPTEMBER 19, 1997) REGISTRATION NO. 333-35433
2,021,611 SHARES
TAUBMAN CENTERS, INC.
COMMON STOCK
Taubman Centers, Inc. (the "Company"), is a real estate investment trust (a
"REIT") and the managing general partner of The Taubman Realty Group Limited
Partnership ("TRG"), which owns, develops, acquires, and operates regional
shopping centers nationally.
All of the shares of Common Stock, par value $0.01 per share (the "Common
Stock"), offered by this Prospectus Supplement and the accompanying Prospectus
are being sold by the Company. The Company's Common Stock is listed on the New
York Stock Exchange (the "NYSE") (symbol: TCO). On the date of this Prospectus
Supplement, the closing price of the Common Stock on the NYSE was $13.1875 per
share.
To ensure that the Company remains a REIT for Federal income tax purposes,
among other reasons, shares of Common Stock may acquire the status of Excess
Stock (as defined in the accompanying Prospectus) if a holder owns more than
8.23% in value of the outstanding capital stock of the Company. See
"Restrictions on Transfer" in the accompanying Prospectus.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 IN THE ACCOMPANYING PROSPECTUS FOR
CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK. THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Merrill Lynch & Co. (the "Underwriter") has agreed to purchase the shares of
Common Stock offered by this Prospectus Supplement at a price of $12.4952 per
share, resulting in aggregate proceeds to the Company of $25,260,434, subject
to the terms and conditions set forth in the Underwriting Agreement. TRG will
pay the expenses of the offering, estimated to be $100,000, and will reimburse
the Company for the $0.6923 per share difference between the price of the
Common Stock to the Underwriter and the closing price of the Common Stock on
the date of this Prospectus Supplement. The Underwriter intends to deposit the
shares, valued at the last reported sales price, with the trustee of the
Equity Investor Fund Cohen & Steers Realty Majors Portfolio (A Unit Investment
Trust) (the "Trust") in exchange for units in the Trust. The units of the
Trust will be sold to investors at a price based upon the net asset value of
the securities in the Trust. For purposes of this calculation, the value of
the Common Stock on the date of this Prospectus Supplement was $13.1875 per
share.
MERRILL LYNCH & CO.
The date of this Prospectus Supplement is April 23, 1998.
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, AND IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE COMMON STOCK
OFFERED HEREBY, NOR DO THEY CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, ANY OF THE COMMON STOCK OFFERED HEREBY TO ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO
SUCH PERSON.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
The Company . . . . . . . . . . S-3
Use of Proceeds . . . . . . . . S-3
Description of the Common Stock S-3
Federal Income Tax Considerations S-4
Underwriting . . . . . . . . . S-4
Legal Matters . . . . . . . . . S-5
Incorporation By Reference . . S-5
PROSPECTUS
PAGE
The Company . . . . . . . . . . 1
Risk Factors . . . . . . . . . 1
Use of Proceeds . . . . . . . . 5
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends . . . . . . . 5
Certain Provisions of the
Articles of Incorporation
and Bylaws . . . . . . . . . 5
Description of Common Stock . . 7
Description of Preferred Stock 7
Description of Depositary 11
Shares . . . . . . . . . . .
Description of Warrants . . . . 14
Restrictions on Transfer . . . 15
Federal Income Tax
Considerations . . . . . . . 17
ERISA Considerations . . . . . 30
Plan of Distribution . . . . . 32
Legal Matters . . . . . . . . . 32
Experts . . . . . . . . . . . . 33
Available Information . . . . . 33
Incorporation by Reference . . 33
Glossary . . . . . . . . . . . 35
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITER MAY BID FOR, AND PURCHASE, COMMON STOCK IN THE
OPEN MARKET. SEE "UNDERWRITING."
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THE COMPANY
The Company is organized and operates in such a manner so as to qualify as a
REIT under the Internal Revenue Code of 1986, as amended. Through its 38.44%
interest in TRG, the Company engages in the ownership, management, leasing,
acquisition, development, and expansion of regional shopping centers. TRG
owns interests in 25 regional and super-regional shopping centers (the "Taubman
Shopping Centers") located in 12 states. Two additional centers are under
construction and are expected to open in November 1998 and March 1999,
respectively. Twenty-two of the Centers are "super-regional" centers having
more than 800,000 square feet of gross leasable area. TRG also owns certain
regional retail shopping center development projects and more than 99% of The
Taubman Company Limited Partnership ( the "Manager"), which manages the Taubman
Shopping Centers and provides other services to TRG and the Company.
The Taubman Shopping Centers are among the most productive (measured by mall
tenants' average per square foot sales) in the United States. In 1997, mall
tenants had average per square foot sales of $384, which is higher than any
mall portfolio owned by a public company. Higher sales per square foot enable
mall tenants to pay occupancy costs that are a greater percentage of total
sales while remaining profitable. TRG derives over 90% of its revenue from
mall tenants, over 75% of which (as a percentage of mall leasable area) are
national chains.
The placement of the Taubman Shopping Centers in affluent trade areas and
the Centers' larger than average size are among the factors that enable TRG to
attract the most desirable department stores as anchors. Although the anchors
generate a relatively small percentage of TRG's revenue in the form of rent,
their often dominant market presence enhances TRG's ability to merchandise each
Center individually, creating an exciting and diverse mix of mall tenants
tailored to the Center's location and the demographic makeup of its potential
customers.
USE OF PROCEEDS
TRG will pay the expenses of this offering, including the discount to the
Underwriter described on the cover page of this Prospectus Supplement. The
Company will use the entire proceeds of this offering to acquire an additional
interest in TRG, resulting in the Company holding a 39.36% interest in TRG.
TRG will use the net proceeds for general partnership purposes.
DESCRIPTION OF THE COMMON STOCK
The following discussion supplements (and to the extent of inconsistencies
supersedes) the discussion under "Description of Common Stock" in the
accompanying Prospectus.
VOTING RIGHTS
Subject to such preferential rights as may be granted by the Board of
Directors in connection with the future issuance of additional series of
Preferred Stock, holders of Common Stock are entitled to one vote per share on
all matters to be voted on by shareholders. Currently, a majority of the
outstanding shares of Common Stock is required for a quorum. Any action
requiring shareholder approval (other than the election of directors) will be
approved upon the affirmative vote of the holders of two-thirds of the
outstanding shares of Capital Stock entitled to vote (currently, two-thirds of
the outstanding shares of Common Stock). Directors are elected by a plurality
of the votes cast. If the Company is in arrears in the payment of six quarterly
dividends on the Series A Preferred Stock, the holders of Series A Preferred
Stock will be entitled to elect two directors until the arrearage has been
eliminated. The Company is current in the payment of dividends on the Series A
Preferred Stock.
Holders of Common Stock do not have cumulative voting rights in the election
of directors. Holders of shares of Common Stock do not have preemptive rights,
which means they have no right to acquire additional securities that the
Company may issue.
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DIVIDEND AND LIQUIDATION RIGHTS
Holders of Common Stock are entitled to receive ratably such dividends as may
be declared on the Common Stock by the Board of Directors in its discretion
from funds legally available for the payment of dividends. In the event of the
liquidation, dissolution, or winding up of the Company, holders of Common Stock
are entitled to share ratably in all assets remaining after payment of all
debts and other liabilities and any liquidation preference of the holders of
Preferred Stock. Currently, the Common Stock ranks junior to the Series A
Preferred Stock as to dividends and upon liquidation.
RESTRICTIONS ON TRANSFER, ETC.
The Company's Articles of Incorporation generally prevent any holder (other
than certain shareholders who acquired their positions in the Company's initial
public offering) from owning more than 8.23% in value of the Company's
outstanding Capital Stock (currently the Common Stock and the Series A
Preferred Stock). See "Restrictions on Transfer," "Description of Preferred
Stock" (which is supplemented by the preceding discussion of the Series A
Preferred Stock), and "Certain Provisions of the Articles of Incorporation and
Bylaws" in the accompanying Prospectus for material restrictions on the
transfer and ownership of Common Stock and other provisions of the Company's
organizational documents that may impede a hostile takeover of the Company.
LISTING AND TRANSFER AGENT
The Common Stock is listed on The New York Stock Exchange (symbol: TCO). The
registrar and transfer agent for the Common Stock is ChaseMellon Shareholder
Services, L.L.C.
FEDERAL INCOME TAX CONSIDERATIONS
For a discussion of the material Federal income tax considerations associated
with an investment in the Common Stock, see "Federal Income Tax Considerations"
in the accompanying Prospectus.
UNDERWRITING
Subject to the terms and conditions contained in an Underwriting Agreement
dated the date of this Prospectus Supplement, the Underwriter has agreed to
purchase, and the Company has agreed to sell, the shares of Common Stock
offered by this Prospectus Supplement, as set forth on the cover page of this
Prospectus Supplement. The Underwriting Agreement provides that the
obligations of the Underwriter are subject to certain conditions precedent, and
the Underwriter will be obligated to purchase all of such shares if any are
purchased.
The Underwriter intends to deposit the Common Stock offered by this
Prospectus Supplement with the Trust, which is a registered unit investment
trust under the Investment Company Act of 1940, for which the Underwriter acts
as sponsor and depositor, in exchange for units of the Trust. The Underwriter
is an affiliate of the Trust.
Pursuant to the Underwriting Agreement, the Company has agreed to indemnify
the Underwriters against certain civil liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments the
Underwriters may be required to make in respect thereof.
In connection with this offering, the rules of the Securities and Exchange
Commission permit the Underwriter to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions may consist of bids
or purchases for the purpose of pegging, fixing, or maintaining the price of
the Common Stock.
If the Underwriter creates a short position in the Common Stock in connection
with this offering, (i.e., if it sells more shares of Common Stock than are set
forth on the cover page of this Prospectus Supplement), the Underwriter may
reduce that short position by purchasing shares of Common Stock in the open
market.
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In general, purchases of a security for the purposes of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might otherwise be in the absence of such purchases.
Neither the Company nor the Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition,
neither the Company nor the Underwriter makes any representation that the
Underwriter will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
The Common Stock is listed on the NYSE under the symbol "TCO." The Company
has applied for listing of the shares of Common Stock offered hereby on the
NYSE.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Miro Weiner &
Kramer, Bloomfield Hills, Michigan, and for the Underwriter by Hogan & Hartson
L.L.P., Washington, D.C.
INCORPORATION BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange Act
(file number 1-11530) are incorporated by reference into this Prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997; and
(b) the Company's Proxy Statement for its 1998 Annual Meeting of
Shareholders (excluding the Report of the Compensation
Committee and the stock performance graph contained in the
Proxy Statement).
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act (including any documents incorporated by
reference in such documents) after the date of this Prospectus Supplement and
prior to the termination of the offering of the Common Stock offered by this
Prospectus Supplement shall be deemed to be incorporated by reference in this
Prospectus Supplement and to be a part of this Prospectus Supplement from the
date of filing such documents.
Any statement contained in a document incorporated or deemed
incorporated by reference in this Prospectus Supplement shall be deemed to be
modified or superseded for purposes of this Prospectus Supplement to the extent
that a statement contained in this Prospectus Supplement or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference in this Prospectus Supplement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus Supplement or
the accompanying Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus Supplement has been delivered, upon the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference in this Prospectus Supplement (other than exhibits to such
documents that are not specifically incorporated by reference in such
documents). Written or oral requests for copies should be directed to Taubman
Centers, Inc., 200 East Long Lake Road, Bloomfield Hills, Michigan 48304,
Attention: Investor Relations (telephone: (248) 258-6800).
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