March 2, 2017 / 3:38 PM / 6 months ago

UPDATE 2-Real estate activist Litt launches proxy fight at Taubman

(Adds Taubman statement)

By Michael Flaherty and Ankit Ajmera

March 2 (Reuters) - Activist hedge fund Land and Buildings Investment Management LLC said it nominated two directors for the board of Taubman Centers Inc, escalating its fight against the owner of U.S. and Asian shopping centers.

Land and Buildings said its nominees are the hedge fund's founder and CEO, Jonathan Litt, and Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. Elson also serves on the board of restaurant chain Bob Evans Farms Inc.

Land and Buildings pressured Taubman last October to explore strategic options, including a sale or a spin-off of certain assets. The Stamford, Connecticut-based hedge fund owned 1.1 percent of Taubman's shares as of last quarter, Thomson Reuters data show, making it the 21st largest shareholder.

Taubman, a more than $4 billion company based in Bloomfield Hills, Michigan, has a broad portfolio of shopping centers, most located in the United States, three in China and one in South Korea. Its U.S. properties include the Cherry Creek shopping center in Denver, Colorado, and the Fair Oaks mall in Fairfax, Virginia.

The company's stock hit $81 per share last August but has held steady in the $70 range since last year and was last at $68.96.

Taubman, in a statement from a company spokeswoman, said it had a qualified, independent board and that the company had delivered a compounded annual shareholder return of around 14.5 percent over the last 20 years.

The company added that the Taubman family has an economic ownership interest of around 30 percent and that its interests are aligned with shareholders.

"The company is committed to engaging constructively with shareholders, and values investors’ input and perspectives in its drive to create sustainable value," Taubman said.

Litt's main target is Taubman's Chairman and CEO Bobby Taubman, who has exerted too much power over the board and management team at the expense of shareholders, the investor said.

Litt is a real estate focused activist, who aggressively targets companies he deems undervalued and in need of leadership or strategy changes. Litt's real estate targets since 2016 include FelCor Lodging Trust Inc, whose New York City portfolio of hotels includes the Knickerbocker, Royalton and the Morgans New York.

Litt is also pushing for rapid changes at Forest City Realty Trust Inc, a campaign he launched earlier this year. (Reporting by Michael Flaherty in New York and Ankit Ajmera in Bengaluru; Editing by Nick Zieminski and Lisa Shumaker)

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