UPDATE: Simon raised bid to cement Mills acquisition

A $1.64 billion offer from Simon Property Group and a partner for Mills Corp. has been accepted, the Chevy Chase, Md.-based shopping center developer said today.

The offer was about 5 percent higher than the $24 per share Indianapolis-based Simon and Farallon Capital Management of San Francisco extended in an unsolicited bid Feb. 23.

Mills said today it has ended its previous merger agreement with Toronto-based Brookfield Asset Management Inc.

Simon, the nation’s largest shopping mall owner, and Farallon, which owns 10.8 percent of Mills stock, pursued Mills after Brookfield offered $1.35 billion.

Mills owns 38 malls across the country. Many are upscale and focused on entertainment. In early January, the company revealed accounting errors and official misconduct that it said might drive it into bankruptcy. Mills stock has tumbled from $65.85 a share in September 2005. It was trading for about $26 this week.

The deal is expected to close in 45 days.

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