Simon Property Group, Inc. (NYSE: SPG) and Farallon Capital Management, L.L.C., announced that the acquisition of The Mills Corporation (NYSE: MLS) by SPG-FCM Ventures, LLC, a joint venture between an entity owned by SPG and funds managed by Farallon, was completed on April 3, 2007. The acquisition was completed by means of a merger of a subsidiary of SPG-FCM Ventures and The Mills, following the successful tender offer for Mills common shares.
On March 29, 2007, SPG and Farallon announced that together with shares owned by funds managed by Farallon, approximately 96.8% of the outstanding Mills common shares had been tendered and were accepted for payment. In the merger, all outstanding common shares of The Mills were converted into the right to receive the same $25.25 in cash per share as paid in the tender offer, without interest.
David Simon, Chief Executive Officer of SPG, said, "We are very pleased with the completion of this transaction. The Mills portfolio of assets is an excellent strategic fit with our existing retail platforms and presents a compelling opportunity for SPG's stockholders and Farallon investors. We believe that our significant experience operating both regional malls and outlet centers, substantial resources, previous ownership interest in certain Mills properties and history of successful acquisitions, together with Farallon's financial resources and expertise, will allow us to improve the performance of these assets."
Richard B. Fried, a Managing Member of Farallon, said, "We are excited to partner with SPG, the leader in the retail real estate industry, in the ownership of this portfolio. SPG's operating expertise and experience in the redevelopment of retail real estate, combined with our strong financial support, should result in meaningful improvement in the operations and cash flow of these assets."
The Mills portfolio is comprised of two distinctive types of assets - 20 regional malls and 17 traditional Mills properties - totaling over 45 million ft² of GLA. A traditional Mills property typically comprises well over one million ft² of GLA and has a combination of traditional mall, outlet center and big box retailers and entertainment uses, all focused on delivering value for the consumer. These assets are well-located in major metropolitan markets, have considerable consumer brand equity and large trade areas, and generate significant total sales volumes.
SPG has assumed management responsibilities for the Mills portfolio of assets. SPG will integrate management and administrative support functions of the Mills regional malls into its existing 172 regional mall portfolio. The 17 traditional Mills properties will be operated as a separate retail real estate platform. This platform will be directed by J. Scott Mumphrey, an SPG executive vice president with 27 years of experience within the organization. The Mills platform will be managed and leased from an office in the Washington, D.C. area, with administrative support functions performed in SPG's corporate headquarters.
All shares of the various series of The Mills Corporation preferred stock remain outstanding following the merger with their terms unchanged. It is currently expected that within the next few months, the holders of Mills preferred shares will receive liquidation payments.
SPG-FCM Ventures, LLC anticipates the refinancing of the Mills' Senior Term Credit Facility and the debt of several individual Mills properties over the next few months.
Source: Simon Property Group
