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CHEVY CHASE, MD-Gazit-Globe Ltd. has revised its proposal for recapitalizing the Mills Corp. by increasing its offer by $1 per share to $25.50. The Israeli-based real estate investment firm made its original $1.2-billion recap offer, or $24.50 per share, at the time it acquired 9% of the mall owner’s outstanding common stock in October.

In a letter to Mills CEO Mark S. Ordan, Gazit again said the recapitalization would be the beginning of a process toward revitalizing Mills and providing an opportunity for all stockholders to maximize value, according to the company. “We believe this enhanced recapitalization proposal will help maximize value to Mills’ stockholders allowing them to benefit from the upside potential inherent in the company,” said Chaim Katzman, Gazit-Globe’s chairman. “We are willing to immediately begin working towards a definitive agreement and look forward to helping restore Mills to its rightful place as one of our industry’s leaders.”

In addition to the $1-per-share increase, the proposal includes the elimination of the requirement for a separate class of common stock, the easing of key closing conditions and assumptions, the reduction of confirmatory due diligence period to only 15 days, and no financing contingency, according to Gazit. The firm also states its board has already approved the proposal, contingent upon due diligence.

Calls to Mills seeking response to the offer were not returned by deadline.

Two weeks after acquiring Mills stock, Gazit-Globe filed a complaint against the locally based retail REIT asking the company to hold its annual meeting in a timely fashion. It claimed that Mills’ board needs to take the matter of recapitalization before shareholders. Five days later, Mills said it was scheduling its annual shareholders meeting for Dec. 21, a date that was selected before the Gazit-Globe complaint, according to Mills’ officials. However, Mills left open the possibility of pushing that meeting back a week if “the company determines that it is unable to complete the process for the solicitation of proxies by Dec. 21,” as GlobeSt.com previously reported.

Mills owns 39 malls and retail-entertainment centers across the US. Earlier this week, the company reported in an SEC filing that occupancy rates dropped to 87.9% at its centers as of Sept. 1, from 90.4% as of Dec. 1 last year. However, for the 12 months ended Sept. 30, sales per sf were $391, up from $372 during the same year-ago period. According to the International Council of Shopping Centers, sales per sf at the average US mall are $392.

Mills came under fire last year for accounting irregularities, an SEC investigation, higher-than-projected development costs, and other issues. Since that time, the firm has put itself up for sale and let go about 160 employees.

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