A major hedge fund investor in
has increased its stake in the embattled mall developer.
Stark Investments has purchased 720,000 shares in the company since late March and now controls 4.95 million shares, or 8.7% of Mills' stock, according to a
Securities and Exchange Commission
filing late Tuesday. Stark said in its filing that it is buying shares for investment purposes but may seek to control or otherwise influence management in the future.
has indirect ties to a prospective Mills buyer. A member of the Stark team is Louis Conforti, who was once chief financial officer of Prime Group Realty Trust, a formerly public Chicago-based office owner that was bought by the Lightstone Group. David Lichtenstein, the chairman of Lightstone, recently told
that he was preparing a bid for Mills.
Simon Property Group
Vornado Realty Trust
and Australian mall developer
are also considered to be interested in Mills, or at least some of its assets.
Mills has been exploring a sale of the company or assets as it also deals with shareholder lawsuits and an SEC investigation related to its ongoing financial restatement.
On Tuesday, Mills set a June 13 deadline for letters of interest from prospective buyers. "To date, the company has entered into customary confidentiality agreements with multiple potential buyers and investors," the company said. "Some of these potential buyers have expressed a preliminary interest in all or some of the company's assets."
In a research note, Bank of America analyst Ross Nussbaum provided additional color on his conversations with Mills' management this week at the annual International Council of Shopping Centers conference in Las Vegas.
"An equity infusion is not on the top of the list of MLS' strategic alternatives, in ourview, although the company may ultimately not have a choice if the sale processdoes not play out," Nussbaum wrote. "MLS did state that they would rather sell part of the company at a fair price, than the whole company at a discount if potential bidders don't offerwhat the company considers to be an appropriate value."