Simon and Farallon Propose to Acquire Mills for $24.00 Per Share in Cash
Offer Provides Higher Price Than Brookfield Asset Management Agreement and
INDIANAPOLIS and SAN FRANCISCO, Feb. 5 /PRNewswire-FirstCall/ -- Simon
Property Group, Inc. (NYSE: SPG) ("SPG") and Farallon Capital Management,
L.L.C. ("Farallon") today announced they have sent a letter to the Board of
Directors of The Mills Corporation (NYSE: MLS) ("Mills") proposing to enter
into a merger agreement to acquire Mills for $24.00 per share in cash.
The proposed merger agreement would provide for a cash tender offer for
all outstanding shares of Mills common stock. It would provide Mills
shareholders with a higher price than under the existing Mills agreement with
Brookfield Asset Management Inc. (NYSE: BAM) and would enable Mills
shareholders to receive payment at least six months before the publicly
announced expected closing date for the Brookfield transaction. Funds managed
by Farallon currently own approximately 10.9 percent of Mills outstanding
common shares, making these funds the largest reported Mills shareholder.
David Simon, Chief Executive Officer of SPG, said, "This is a unique
opportunity to acquire a portfolio of quality retail assets. SPG's experience
operating upscale regional mall and outlet centers; previous ownership
interest in certain Mills properties; and successful track record with
acquisitions, integration, and property management, uniquely position us to
maximize the value of these assets and make this a beneficial transaction for
SPG and Mills shareholders and Farallon investors. We look forward to working
with the Mills joint venture partners to improve the performance of these
Richard B. Fried, a Managing Member of Farallon, said, "We are excited by
the opportunity to partner with SPG, which is the clear leader in the retail
real estate sector. SPG's operating expertise, combined with the strong
financial support we are both providing, will allow Mills' quality assets to
perform to their true potential."
Following is the text of the letter sent today to the Mills Board of
Directors by David Simon and Richard B. Fried:
Board of Directors
c/o Mark Ordan, Chief Executive Officer and President
The Mills Corporation
5425 Wisconsin Avenue, Suite 500
Chevy Chase, MD 20815
Simon Property Group, Inc. ("SPG") and Farallon Capital Management, L.L.C.
("Farallon") are pleased to submit a proposal to acquire The Mills Corporation
("Mills") in an all-cash transaction that would provide your shareholders with
the opportunity to receive a higher price than under the Brookfield Asset
Management Inc. ("BAM") agreement and the ability to receive payment at least
six months sooner through a tender offer. Funds managed by Farallon
collectively own 10.9% of Mills' common shares, making them your largest
Specifically, our proposal contemplates a merger agreement with Mills
- A price of $24.00 in cash per Mills common share.
- A tender offer for all Mills common shares to be commenced by an
acquisition vehicle jointly owned by SPG and certain funds managed by
Farallon. This would provide your stockholders with the opportunity to
receive our higher cash acquisition price significantly sooner than
under the BAM agreement and reduce the risk of adverse business
developments interfering with the transaction. Our ability to close the
tender offer at least six months earlier than the publicly announced
expected closing date under the BAM agreement could represent an
incremental benefit of at least $1.00 per share to your shareholders on
a net present value basis.
- The opportunity for Mills Operating Partnership common unitholders to
receive $24.00 per share in cash or, at their option, to exchange their
units for limited partnership units of SPG's Operating Partnership based
upon a fixed exchange ratio determined using the price of SPG common
shares at the signing of a merger agreement and our cash offer price for
Mills. This proposal affords Mills unitholders significant advantages
over the BAM agreement through the opportunity to participate in a
larger and more diverse portfolio and to receive a security that has a
history of more than 13 years of paying uninterrupted and growing
- A definitive merger agreement containing terms and conditions at least
as favorable as those contained in your existing merger agreement with
BAM (the "BAM Merger Agreement"), including a fixed break-up fee that
does not increase over time. We are today sending a draft of our
proposed merger agreement to your counsel.
- Replacing the existing $1.55 billion BAM loan with financing (including
a working capital facility) on terms more favorable than under your
credit agreement with BAM.
SPG has also obtained an option to acquire approximately 2.8 million
common shares of Mills from Stark Master Fund Ltd. for $24.00 per share,
effective upon entering into a merger agreement.
The substantial financial resources of both SPG and Farallon support this
proposal. We are each prepared to provide $650 million of equity in support
of our proposal and are today providing to your counsel copies of the equity
commitment letters we are willing to enter into. In addition, SPG would
commit to provide the replacement financing for the BAM loan and any other
financing necessary to close the transaction either directly or through third
We are aware of the restrictions on your ability to enter into discussions
with us imposed by the BAM Merger Agreement, and we are not asking you to take
any action not permitted by that agreement. However, because we are offering
a higher cash price and more attractive terms than BAM, our proposal is a
"Superior Competing Transaction" for purposes of the BAM Merger Agreement, and
we look forward to entering into discussions with you to finalize the
As you know, both SPG and Farallon are familiar with Mills, and we are
prepared to meet with you to answer any questions you may have regarding our
proposal. We look forward to hearing from you promptly so that we can sign a
definitive agreement well in advance of any increase in the break-up fee that
may be payable under the BAM Merger Agreement. You may contact either of us
or our advisors listed on Annex A to this letter.
Simon Property Group, Inc.
Chief Executive Officer
Farallon Capital Management, L.L.C.
Richard B. Fried
Merrill Lynch & Co. is acting as financial advisor, and Fried, Frank,
Harris, Shriver & Jacobson LLP is acting as legal counsel, to Simon Property
Group. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Richards Kibbe & Orbe
LLP are acting as legal counsel to Farallon.
About Simon Property Group
Simon Property Group, Inc., an S&P 500 company headquartered in
Indianapolis, Indiana, is a real estate investment trust engaged in the
ownership, development and management of retail real estate, primarily
regional malls, Premium Outlet Centers(R) and community/lifestyle centers.
The Company's current total market capitalization is approximately $52
billion. Through its subsidiary partnership, it currently owns or has an
interest in 286 properties in the United States containing an aggregate of 201
million square feet of gross leasable area in 38 states plus Puerto Rico.
Simon also owns interests in 53 European shopping centers in France, Italy,
and Poland; 5 Premium Outlet Centers in Japan; and one Premium Outlet Center
in Mexico. Additional Simon Property Group information is available at
About Farallon Capital Management, L.L.C.
Farallon Capital Management, L.L.C. ("Farallon") is a global, San
Francisco-based investment management company that manages discretionary
equity capital of $26 billion, largely from institutional investors such as
university endowments, foundations, and pension plans. Farallon was founded
in March 1986 by Thomas F. Steyer. Farallon invests in public and private
debt and equity securities, direct investments in private companies and real
estate. Farallon invests in real estate across all asset classes around the
world, including the United States, Europe, Latin America and India. More
information about Farallon may be found at www.faralloncapital.com.
IMPORTANT NOTICE: This press release is for informational purposes only
and is not an offer to buy or the solicitation of an offer to sell any of the
Mills common shares. The tender offer described herein has not yet been
commenced. On the commencement date of the tender offer, an offer to
purchase, a letter of transmittal and related documents will be filed with the
Securities and Exchange Commission, will be mailed to shareholders of record
and will also be made available for distribution to beneficial owners of
common shares. The solicitation of offers to buy the Mills common shares will
only be made pursuant to the offer to purchase, the letter of transmittal and
related documents. When they are available, shareholders should read those
materials carefully because they will contain important information, including
the various terms of, and conditions to, the tender offer. When they are
available, shareholders will be able to obtain the offer to purchase, the
letter of transmittal and related documents without charge from the Securities
and Exchange Commission's Website at www.sec.gov or from the information agent
that we select. Shareholders are urged to read carefully those materials when
they become available prior to making any decisions with respect to the tender
This release contains some forward-looking statements as defined by the
federal securities laws which are based on our current expectations and
assumptions, which are subject to a number of risks and uncertainties that
could cause actual results to differ materially from those anticipated,
projected or implied. We undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
SOURCE Simon Property Group, Inc.
CONTACT: Media: Hugh Burns, or Stephanie Pillersdorf, or Brooke
Morganstein, all of Sard Verbinnen & Co, +1-212-687-8080; Investors: Shelly
Doran of Simon Investor Relations, +1-317-685-7330