With its stock price fluctuating wildly over the last year and mired in debt, Mills Corp. shares shot up 26.39%, or $4.69, to $22.46 on news it would be bought out by Brookfield Asset Management. Mills owns 38 shopping malls across the U.S.; Brookfield is acquiring the struggling company for $1.35 billion in cash, or $21 per share. Including assumed debt and preferred stock, the deal will be worth $7.5 billion. With two of Mills' major shareholders proposing recapitalization plans and facing a March 31 deadline to repay a $1.1 billion loan from Goldman Sachs, Mills agreement to be bought by an outside player came as a surprise to some. "We were surprised at the timing of this announcement," said Morningstar analyst Akash Dave. "We thought there'd be some announcement of their strategic intentions [first]." Mills shares have dropped from a high of $65 in July of 2005 to a low of just over $12 this month. After the buyout offer was announced yesterday, Gazit-Globe, Mills second largest shareholder, raised its previous offer of $21 a share by a dollar, opening the door for continued drama surrounding Mills' future.
• Sources: Press Release, Bloomberg, Reuters, Business Week, Wall Street Journal
• Related commentary: Mills Corporation - How Badly is it Doing?, Chaim Katzman Claims The Mills Corp. Is Stonewalling His Recapitalization Efforts, Gazit Globe Wants to Recapitalize Mills Corp.
• Potentially impacted stocks and ETFs: Mills Corp. (MLS), Brookfield Asset Management Inc. (NYSE:BAM), Goldman Sachs (NYSE:GS). Competitors: Developers Diversified Realty Corp. (NYSE:DDR), General Growth Properties Inc. (NYSE:GGP), Simon Property Group Inc. (NYSE:SPG)
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