Canadian asset manager Brookfield Asset Manager has swooped at the 11th hour to buy US mega-mall developer REIT Mills Corporation
Brookfield, formerly known as Brascan, has agreed to pay $1.35bn (£684.7m) in cash for the troubled company. Brookfield will pay $21 (£10.65) a share to buy Mills, representing a premium of 18% over its present share price. When debt and preferred stock is included, the deal is worth $7.5bn (£3.8bn).
The purchase follows a long history of trouble at Mills, which has been burdened by heavy debt and widespread accounting problems. Mills owns 38 shopping malls across the US and will become a subsidiary of Brookfield.
Two major shareholders, hedge fund Farallon Capital and the Israeli real estate company Gazit-Globe, had offered to recapitalise the company to avoid a distressed sale. Farallon offered a $499m (£254m) recapitalization plan at $20 (£10) a share, while Gazit's $1.8bn (£920m) offer included a $500m (£254m) stock sale at an average of $21 (£10.65) a share.
Mills chief executive officer Mark Ordan said that selling to Brookfield ‘achieved an outcome that is the best possible result for all involved’.
Brookfield will assume Mills’ Goldman Sachs debt, which is due at the end of March.
Brookfield has about $50bn (£25bn) of assets under management, including property holdings in New York, Washington, Canada, London and Brazil. It owns and operates timberlands and hydroelectric power generation facilities in both North America and South America.