Embattled US shopping centre owner Mills Corp favours a $1.6bn (£800m) takeover offer from rival Simon Property Group and hedge fund manager Farallon Capital Management, which tops an earlier agreement Mills made with Brookfield Asset Management.
Mills said its board of directors concluded that the Simon/Farallon deal, at $24 a share, was ‘superior’ to Brookfield's $21-a-share offer. share deal, valued at $1.35 billion.
Mills said it would terminate the deal reached last month with Brookfield unless, within three business days, Mills and Brookfield ‘amend’ their agreement or better the Simon/Farallon offer.
Mills said its board considered a number of factors, including the higher price offered by Simon and Farallon and the likelihood that the transaction could be completed more quickly than the Brookfield one. Ending the Brookfield agreement would result in Mills paying a $40m (£20m).
Mills, which owns 38 shopping centres in the US, has struggled in the past year, saddled with accounting problems and heavy debt that it warned in January could push it into bankruptcy.
The Securities and Exchange Commission is investigating Mills' accounting issues, which the company said were widespread and could trim up to $352m (£176m) from its net asset value. Mills has yet to file its 2005 annual report and plans to restate earnings as far back as 2001.