The Mills Corp. is quite popular these days.
Already beginning a merger with Brookfield Asset Management, the Chevy Chase-based developer, owner and manager of retail destinations, has received a new proposal to close that transaction and be purchased for $24 per share in cash by a new group.
The offer comes from Simon Property Group Inc. and Farallon Capital Management LLC, Mills? largest shareholder, controlling 10.9 percent of the stock. The transaction would involve the acquisition of Mills? common stock, followed by a merger, a news release said. The proposal outlines that nontendering shareholders would receive an offer of $24 in cash or a fixed number of units of Simon?s operating partnership at a price to be determined.
The total bid would be for around $1.6 billion, higher than the $1.35 billion offered by Brookfield, The Associated Press reported.
It has also been indicated that Mills could face bankruptcy if both deals fall through, or it fails to refinance the $1 billion it owes on a loan from Goldman Sachs Mortgage Co. The AP also said that the Securities and Exchange Commission was investigating Mills for accounting mistakes that will require restated earnings going as far back as 2001.
The Simon Property Group Inc. is a real estate investment trust company based in Indianapolis, while Farallon Capital Management is an equity capital management firm based in San Francisco.
A letter from David Simon, chief executive officer of Simon Property, and Richard B. Fried, a managing member of Farallon, proposes the closure of the merger with Brookfield, and an acceptance of their proposal.
Under the terms of new agreement, Simon and Fried discuss replacing the loan and credit facility that Brookfield Asset Management Inc. provided to Mills during their merger.
“SPG?s experience operating upscale regional mall and outlet centers; previous ownership interest in certain Mills properties; and successful track record with acquisitions, integration and property management, uniquely position us to maximize the value of these assets and make this a beneficial transaction for SPG and Mills shareholders and Farallon investors,” Simon said.
Mills? board of directors is considering the offer, with the current merger agreement with Brookfield still in effect.
The Mills Corp. operates several local retail outlets, including Marley Station and the Arundel Mills Mall. As of Monday, shares of The Mills Corp. were trading at $25.71, up $3.56 or 16.07 percent.
