- The Washington Times - Monday, February 5, 2007

12:44 p.m.

The battle over local mall developer Mills Corp. continued today as the largest shopping mall owner in the country issued a new bid to buy the company.

Last month, Mills Corp., based in Chevy Chase, Md., entered an agreement to be bought by Brookfield Asset Management Inc. for $1.35 billion or $21 per share.

However, today’s bid, from Simon Property Group Inc. and Farallon Capital Management LLC, Mills’ largest shareholder, came in at $1.56 billion, or $24 per share.

Mills Corp. said the agreement with Brookfield is still in effect but that it will “promptly consider the proposal.”

Simon’s offer is cash, meaning shareholders would receive payment six months before they would under a Brookfield deal, Simon said.

Simon Property Group is an Indianapolis real estate investment trust that owns the Fashion Centre at Pentagon City, Bowie Town Center, Leesburg Corner Premium Outlets and St. Charles Towne Center.

Simon said its experience would make it most qualified to run the Mills properties.

Farallon Capital Management, which owns nearly 11 percent of Mills’ shares, had been furiously looking for someone to save the embattled Mills.

The San Francisco hedge fund originally offered $20 per share in a recapitalization plan. Then it submitted a bid with fellow shareholder Gazit-Globe Ltd., an Israeli real estate company, for $22 per share. Now it is working with Simon.

What makes Mills so valuable, despite its recent revelations that executives may have mismanaged funds and that it was running out of money, is its 38 shopping centers nationwide.

Locally, it owns Lakeforest Mall in Gaithersburg, Potomac Mills and Potomac Town Center in Prince William County, Marley Station in Glen Burnie, Md., and Arundel Mills in Hanover, Md.

A Brookfield spokeswoman declined to comment on the competing bid.

Mills’ stock rose nearly 15 percent to $25.39 by mid-day on the New York Stock Exchange.

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