Gazit Globe Wants to Recapitalize Mills Corp.

 |  Includes: EQY, MLS
by: Lon Juricic

In a 13D filing on The Mills Corporation (MLS), Gazit-Globe Ltd. disclosed a 9% stake (5.1 million shares) in the Company.

Gazit-Globe's said its goal is to recapitalize what it views as a struggling Mills Corporation, and that it is prepared to "invest up to $1.2 billion into Mills."

Chaim Katzman, Gazit-Globe's chairman, said, "At this point it is clear to us that an outright sale of the company is not in the best interests of shareholders. We're urging the Mills' board of directors in the strongest terms possible to consider our recapitalization proposal" He also said, "We believe Mills can and should be rebuilt, and not sold."

In the Gazit-Globe's September 29th proposal to Mills the company said:

"Based upon our extensive review of the currently available public information, and, as discussed below, our in-depth property analysis, we are prepared to recapitalize the Company by investing new capital in the form of common stock. The cash amount would be up to $1.2 billion at a price per share of $24.50. This new common stock would be classified as Series B and would entitle Gazit to a majority of the seats on the Company’s board. The new common stock would also be convertible into the currently outstanding series of common stock. This new investment would be in addition to our current holdings of the Company's common stock."

Gazit is a real estate investment company that trades on the Tel Aviv Stock Exchange. The company operate their business in North America and Europe mainly through a 41% ownership of Equity One, Inc. (NYSE:EQY) and large ownership stake in First Capital Realty, Inc. and Citycon OYJ.

Mills Corp Chart 25 10 06 Equity One Chart 25 10 06