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CHEVY CHASE, MD-The Mills Corp.’s board of directors is considering a proposal by Simon Property Group and Farallon Capital Management to acquire the company for $24 per share. The proposal tops the $21 per share, or $7.5 billion that Brookfield Asset Management had offered last month.

Mills’ board is still deciding on the Brookfield proposal but is considering the Simon-Farallon deal because it could lead to what a company document calls a “Superior Competing Transaction.” Mills’ management and advisors will now start discussions with the parties.

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

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 firm and Simon. Mills shares were trading this afternoon close to $26 per share.

Mills owns 38 US shopping centers totaling 47-million sf. The portfolio would be a good fit for Simon, says David Simon, that Indianapolis-based company’s chief executive, because of its mix between value-oriented and traditional-mall assets. Simon is both the largest mall and outlet-center in the country, with 286 properties.

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