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ARLINGTON, VA-The Mills Corp., the shopping mall REIT specializing in large-scale retail and entertainment destinations, has called on JP Morgan and Goldman Sachs to investigate a possible sale of the company, according to published reports. In a research report, Bank of America subsidiary Banc of America Securities LLC concludes that Mills is an "unlikely acquisition candidate." Having been in business for just over two decades Mills oversees about 51 million sf of leasable space at 42 retail properties across the country and abroad.

Despite news of JP Morgan and Goldman Sachs' involvement, BOAS stands firm in its belief that Mills is not a good buy at the moment and would not likely command a great deal of interest. "We continue to believe that a sale of the company is not imminent for the following reasons: 2005 audited financials are not yet available; there remains uncertainty surrounding the potential liability resulting from the SEC inquiry and shareholder lawsuits; and the uncertain outlook for Meadowlands Xanadu."

Meadowlands Xanadu is a proposed 4.7-million-sf entertainment and retail destination in Bergen County, NJ. Mills, however, has targeted Meadowlands Xanadu as one of its projects in the pipeline that would be well positioned to increase shareholder value. BOAS has other ideas about Mills' future. "We believe that partial asset sales are in the cards," the report concludes. "While we don't believe Mills is for sale, the company is still facing a liquidity issue. As such, we believe that Mills has retained these investment banks as advisors to assist in the disposition of joint venture stakes in individual assets within Mills' portfolio." A BOAS spokesperson was unavailable to comment by deadline, while a Mills spokesperson tells GlobeSt.com that the company is not commenting on the matter.

Mills disclosed in January that it would have to restate earnings results for the period between the first quarter of 2000 and the third quarter of 2005, based on an audit that revealed accounting errors. The retail property owner and developer also announced it would institute a new multifaceted strategy involving its core operations, management staff and internal financial structure in a move to improve operations.

The company also revealed that it would write off costs for 10 planned projects, six in the US and four international endeavors. "We intend to enhance our focus on those projects with the greatest potential for shareholder value creation," Mills president Mark D. Ettenger said in a prepared statement announcing the restructuring changes. "Our approach to every project will continue to stress discipline and a careful evaluation of risk-adjusted return, so that we can determine if the value to be created warrants the level of capital and management attention needed to pursue each opportunity."

Instant Insights /

Mills Corp. Researches Sale

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