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Simon offer for Mills means the 'king has arrived'

February 5, 2007

The $1.56 billion takeover offer that Simon Property Group unveiled this morning for mall owner Mills Corp. was long overdue, said a RBC Capital Markets analyst.

Rich Moore, who follows the Indianapolis-based shopping mall owner for the Columbus, Ohio, company, told Bloomberg he was baffled why Simon hadn’t pounced earlier on Mills’ 38 regional shopping malls at a time few malls are for sale.

“The king has arrived on the scene and put his bid in, and all is right with the world,” Moore said of the world’s largest shopping mall company.

Simon teamed with San Francisco-based Farallon Capital Management Inc.—Mills’ largest shareholder—to make the offer. Each is putting $650 million in equity toward the offer.

Their bid of $24 per share is $3 a share higher than a January offer from Brookfield Asset Management Inc. of Toronto, Canada.

 

Mills said it will consider the Simon-Farallon offer.

Mills, headquartered in Chevy Chase, Md., is concentrated in ritzy, entertainment-focused malls.

In early January, Mills revealed accounting errors and official misconduct that it said might drive it into bankruptcy.

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