Town Center at Aurora owner Simon Property Group Inc. and investment firm Farallon Capital Management LLC have offered to pay $1.56 billion for the financially troubled owner of Lakewood’s Colorado Mills mall.
The two companies on Monday made an unsolicited offer of $24 per share for Mills Corp., topping an earlier bid of $21 per share made last month by office-property owner Brookfield Asset Management Inc. Mills had previously said it would accept Brookfield’s offer.
The new offer by Indianapolis-based Simon and San Francisco-based Farallon adds another twist to the ongoing saga of Mills. The struggling company is involved in a massive accounting investigation that is expected to erode shareholder equity by $347 million to $352 million once the company’s finances are restated.
The Chevy Chase, Md.-based company also warned last month that it could be forced into bankruptcy if it didn’t sell itself by March 31.
Brookfield stepped forward with its $21-per-share offer Jan. 17. That offer came after Farallon and Israeli investment firm Gazit-Globe made separate offers to recapitalize the company.
Mills said it would consider the new offer but that its original agreement with Brookfield remains in effect.
“There can be no assurance as to whether the Simon/Farallon proposal will lead to a definitive binding agreement with the Simon/Farallon group,” the company said in a news release on its website.
“Logical buyer”
RBC Capital Markets analyst Rich Moore said in a research note that the offer by Simon and Farallon is the most logical arrangement because Simon is already in the mall business.
The company is a publicly held real-estate investment trust and is the nation’s largest owner of shopping malls. Its holdings include the Mesa Mall in Grand Junction, the 100-store Copley Place in Boston and the Forum Shops, adjacent to Caesars Palace in Las Vegas. The company has a market value of $52 billion.
“The only logical buyer for the (Mills) portfolio is one of the major mall REITs,” Moore said in the note. “Mall assets are simply too scarce and too valuable for the major mall REITs to let an opportunity to acquire 38 regional mall assets simply slip by.”
Moore said he did not expect another company to step forward with a higher bid but warned that shareholders could reject the deal if Mills’ financial restatement reveals that a higher price is warranted.
Locally, the Colorado Mills mall has proved a disappointment to Lakewood city leaders, who say Mills Corp. has been too consumed by its internal struggles to focus on the property.
Lakewood city manager Mike Rock said he has been encouraged by interest from potential buyers.
“It reinforces our belief that the Mills properties are well- located and are terrific retail opportunities,” Rock said. “The problem has been with the management and not the properties themselves.”
The mall has met its financial projections but never attracted the mix of outlet and entertainment-driven tenants that Mills initially proposed for the site.
Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.
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$24
New per- share offer to buy Mills Corp., owner of Lakewood’s Colorado Mills
$21
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per-share offer that Mills says remains in effect
