According to a joint announcement by the two firms, Brookfield has signed a definite agreement to acquire Mills for cash at $21 per share--paying out approximately $1.35 billion for the outstanding common stock of the Mills and the Mills LP. The all-in price, including debt, is $7.5 billion. (CORRECTION: The GlobeSt.com Breaking News Alert overstated the price.)

Brookfield is forming a new subsidiary in which to merge Mills. It is also providing the company with debt financing until the merger is complete, taking on the Mills' $1-billion senior term loan from Goldman Sachs Mortgage Co. The company had until March 31 to repay the loan. In a recent SEC filing the company stated it might have to seek bankruptcy protection because of the looming deadline. Brookfield is also providing a $500-million revolving line of credit.

"With this transaction, we have completed our strategic alternatives process by joining with a world class real estate owner and operator," Mark Ordan, chief executive officer and president of Mills, says in a statement. " After a very competitive process, in which our board considered numerous alternatives for the company, we believe we have achieved an outcome that is the best possible result for all involved."

This week San Francisco-based Farallon Capital Management offered to recapitalize the company by acquiring $499 million of newly issued shares at $20 per share. Gazit-Globe also made its last offer for Mills in an SEC filing, at $1.1 billion, as reported in GlobeSt.com.

Ordan says the deal with Brookfield will provide the necessary resources to upgrade properties and continue to attract tenants. The merger is expected to close in the second half of 2007.

Mills has been seeking a buyer for the company for a year or more. Last year it sold its foreign assets and some of its major projects, including the Xanadu mixed-use complex in New Jersey, in order to shore up its finances. The company is also restating financial statements for 2001 through 2004 and the first three quarters of 2005. Brookfield and Mills were not able to return calls in time for publication.

Instant Insights /

Brookfield To Acquire Mills Corp. for $7.5B

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