proposal

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Mills' board is still deciding on the Brookfield proposal but isconsidering the Simon-Farallon deal because it could lead to what acompany document calls a "Superior Competing Transaction." Mills'management and advisors will now start discussions with theparties.

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As part of their proposal Simon and Farallon are offering $650million in equity and plan to replace a $1.55-billion loan withfinancing that will include a working capital facility. MerrillLynch is the financial advisor to the two parties. Simon's legalrepresentative is Fried, Frank, Harris, Shriver & Jacobson,while Paul, Weiss, Rifkind, Wharton & Garrison LLP and RichardsKibbe & Orbe LLP are legal counsel to Farallon.

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Farallon already owns about 10.9% of Mills' outstanding shares,making it the largest single reported shareholder of the company,according to a statement released by the San Francisco-based firmand Simon. Mills shares were trading this afternoon close to $26per share.

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Mills owns 38 US shopping centers totaling 47-million sf. Theportfolio would be a good fit for Simon, says David Simon, thatIndianapolis-based company's chief executive, because of its mixbetween value-oriented and traditional-mall assets. Simon is boththe largest mall and outlet-center in the country, with 286properties.

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