Simon’s tussle for Mills likely to escalate, experts say

Simon Property Group might have to work harder to buy Mills Corp., say analysts quoted by The Toronto Star.

Indianapolis-based Simon, the world’s largest shopping mall owner, joined with Mills shareholder Farallon Capital Management yesterday to offer an unsolicited bid of $1.56 billion for the Chevy Chase, Md., mall developer. That was $210 million more than an original offer made in January by Brookfield Asset Management Inc., a Toronto commercial real estate company that’s plowing billions of dollars into timberlands and is in talks to buy a large Australian developer.

But Brookfield is likely to counter with a sweetened offer, analysts said. Brookfield will have to fight to land Mills because pension and hedge funds have a rising appetite for real estate, Morningstar Inc. analyst Akash Dave told the newspaper. “I think the drama is only just beginning,” Dave said.

Mills, which fears it might need to seek bankruptcy protection after an internal investigation turned up accounting errors and official misconduct, specializes in flashy malls tied to entertainment.