Taubman Centers Inc. isn’t letting activist investor Lands & Buildings Investment Management have the last say in its fight for more board control.
During a Friday investor presentation, the mall operator’s chairman, president and cheif executive officer Robert Taubman pushed back against Land’s characterization of Taubman Centers as an underperforming company that’s being poorly operated by the Taubman family in order to get two of its own on the board — Charles Elson, a corporate governance expert, and Jonathan Litt, founder and chief investment officer of Land & Buildings.
Taubman first pointed out that Elson is being paid by the investment firm to act as a nominee and said he is a “serial nominee” of Litt’s in various activist campaigns, but said it nevertheless has considered Land & Buildings’ suggestions and found them in line with Litt’s “fundamentally flawed” view of the company.
“We believe Mr. Elson’s skills are not well-suited to guiding the company’s corporate strategy and execution, which the board believes is important in light of the currently evolving retail/mall environment,” Taubman said a letter. “Mr. Elson’s long history with Mr. Litt and Land & Buildings calls into question his ability to be an independent steward of sustainable value creation for all taubman shareholders.”
As for Litt, Taubman said he’s simply “missed the mark” on the company’s performance and already shown his “inability to properly value the company” by giving it a sell or underperform rating more than two dozen times, which were followed by higher stock returns.
“Why should any Taubman shareholder now believe Mr. Litt’s allegations or trust his judgement to serve as a director?” Taubman asked. “In addition, contrary to Mr. Litt’s claims, Land & Buildings is not a long-term investor in the company and has routinely traded in and out of Taubman’s stock, disclosing in its proxy 105 trades since July 31, 2015. Land & Buildings trading history is akin to a day trader looking for short-term profits, not an investor who is committed to a company’s full, long-term potential.”
Taubman went on to note that Land & Buildings began moving to its current 1 percent stake less than a year ago, while members of the Taubman family leading the board have “long maintained” a 30 percent stake and have “rarely sold a single share.”
The company urged investors to not be “misled” by Land & Buildings and the “cartoons or other propaganda it continues to disseminate.”
“Taubman has the right board and the right strategy to deliver shareholder value now and over the long-term.”
Litt unsurprisingly disagreed, saying Monday that the company “continues to selectively interpret the facts when it comes to their underperformance.”
“The company failed to address in any constructive way its history of poor capital allocation, persistent poor operating margins, missed revenue opportunities, and the dual class structure that effectively limits the ability of shareholders to have their voices heard,” Litt said.
For More WWD News, See: