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Mills Prefers Simon Buyout Offer

The mall owner is looking to terminate its current merger pact with Brookfield Asset Management.

Mall developer

Mills Corp.


determined that a $24-a-share buyout offer from

Simon Property Group

(SPG) - Get Simon Property Group, Inc. Report

and partners is superior to its current merger agreement with

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Brookfield Asset Management

(BAM) - Get Brookfield Asset Management Inc. Class A Report


As a result, Mills expects to terminate the $21-a-share Brookfield buyout pact and proceed with the Simon deal, unless Brookfield boosts its offer within three days.

Simon, the country's largest mall owner, is partnering with Farallon Capital, Mills' biggest shareholder, to buy Mills.

A sale of Mills will conclude a year and a half of shareholder woes, as numerous financial restatements and shareholder lawsuits have destroyed value at the company.

Mills' stock fell from a high of over $65 in the summer of 2005 to close at $25.75 Monday. Investors appear to be betting that a higher buyout offer will still materialize.

Mills is an attractive takeover candidate because large portfolios of malls rarely trade hands in the U.S. The company owns a portfolio of 38 properties, which include discount-oriented shopping malls, luxury malls and large retail complexes with an entertainment focus.