Farallon Wins With Late Bid For Mall Co.

Feb 16 2007 | 12:18pm ET

In the matter of troubled mall operator Mills Corp., hedge fund Farallon Capital Management will have the last laugh after all.

Just a month after its $499 million recapitalization plan was rejected in favor of a $1.35 billion buyout bid from Brookfield Asset Management, Farallon, Mills’ largest shareholder with a 10.8% stake, trumped Brookfield with a $1.64 billion cash offer in partnership with Mills competitor Simon Property Group. In addition to paying $25.25 for each share of Mills common stock—Brookfield had offered $21—Farallon and Simon will take on preferred stock and assumed debt bringing the total value of the deal to $7.9 billion.

“This is an excellent opportunity for us to expand our real estate portfolio with high-quality assets in key metropolitan centers and team with the clear leader in the retail real estate sector,” Richard Fried, managing member of San Francisco-based Farallon, said.

Farallon’s previous bid for Mills offered $21 per share. Chevy Chase, Md.-based Mills, which faced a March deadline to pay off a $1 billion loan, said it terminated its agreement with Toronto-based Brookfield “after determining that the SPG/Farallon offer was more favorable to its stockholders.”

More favorable, but still at a discount: Mills shares were trading at $26.70 at the close of the market yesterday, falling to $25.43 at press time Friday.


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