Simon offers to buy Md. mall developer

A buyout offer by retail real estate investment firm Simon Property Group and hedge fund Farallon Capital has sent mall developer The Mills Corporation back into negotiations with the firm whose takeover offer Mills previously accepted.

The Simon-Farallon offer of $1.6 billion would yield $24 per share of Mills stock, while Brookfield Asset Management’s offer of $1.35 billion would total $21 per share. The Simon-Farallon deal also would close quicker.

On Tuesday, Mills gave Brookfield three days to make a counter-offer before Mills cancels the original agreement, potentially losing a $40 million break-up fee.

One of the first in the retail mall industry The Mills Corporation owns 38 shopping centers in the United States. The Chevy Chase, Md.-based company has been plagued by accounting problems and mounting debt and is currently being reviewed by the Securities and Exchange Commission.

According to news reports, Mills has shed major assets and replaced almost all of its top management to prepare for a sale.

Simon owns or has an interest in some 286 mostly retail-related properties throughout the United States, including the Mall of New Hampshire, Pheasant Lane Mall and the Mall at Rockingham Park. – TRACIE STONE

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