Brookfield and The Mills Announce Definitive Agreement for The Mills to Be Acquired by Brookfield for $21 Per Share
biz.yahoo.com
Wednesday January 17, 11:06 am ET
CHEVY CHASE, Md.--(BUSINESS WIRE)--The Mills Corporation (NYSE: MLS) and Brookfield Asset Management Inc. (NYSE and TSX: BAM) announced today that The Mills has entered into a definitive agreement pursuant to which Brookfield will acquire The Mills for cash at a price of US$21 per share, representing a total transaction value of approximately US$1.35 billion for all of the outstanding common stock of The Mills and common units of The Mills Limited Partnership, and approximately US$7.5 billion including assumed debt and preferred stock. Brookfield is a global asset manager focused on property and other infrastructure assets with over US$50 billion of assets under management.
Under the terms of the agreement, The Mills will merge into a newly formed subsidiary of Brookfield, and The Mills common stockholders will receive US$21 in cash for each share of Mills common stock. Common stockholders will also have the ability to elect instead to receive up to a maximum of 20% of the outstanding shares of a continuing public company managed by Brookfield that will hold the assets of The Mills. The stock alternative will be subject to proration if holders of more than 20% of The Mills shares elect to receive stock. If the holders of fewer than 10% of the shares elect this stock rollover, all common shares of The Mills will be exchanged for cash in the merger. In the merger, preferred stockholders of The Mills will receive preferred stock with substantially the same terms.
Limited partners in The Mills Limited Partnership will be offered the same consideration as common stockholders of The Mills, and will have the opportunity to elect instead to roll over all or a portion of such units into limited partnership interests, subject to the terms and conditions of the merger agreement.
Brookfield has also agreed to provide The Mills with debt financing until the completion of the merger by assuming The Mills' approximately US$1 billion Senior Term Loan from Goldman Sachs Mortgage Company and subsequently revising the terms of such loans and providing a US$500 million revolving line of credit on terms to be contained in a restated credit and guaranty agreement.
Mark Ordan, Chief Executive Officer and President of The Mills, said, "With this transaction, we have completed our strategic alternatives process by joining with a world class real estate owner and operator. 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. We believe the transaction with Brookfield not only provides certain value to The Mills' stockholders, but also affords them the opportunity to participate in the upside potential created by this transaction. This merger will provide the resources to upgrade our properties, reinforce our organization and continue to attract premium tenants to The Mills concept."
Bruce Flatt, Managing Partner and CEO of Brookfield, said, "We are pleased to be able to work with The Mills Corporation to move beyond the recent issues it has encountered. We look forward to working with management of The Mills in getting back to business and focusing on service excellence to attract premium tenants to this high quality retail portfolio."
The transaction was unanimously approved by The Mills Board of Directors, with those directors affiliated with Kan Am abstaining. The transaction is subject to approval by The Mills' stockholders at a special meeting of stockholders, as well as other customary closing conditions. The Mills and Brookfield expect to file a proxy statement/prospectus in connection with the special meeting of stockholders following the filing of The Mills' Annual Report on Form 10-K for the year ended December 31, 2006. The merger is expected to close in the second half of 2007.
J.P. Morgan Securities Inc. and Goldman, Sachs & Co. served as financial advisors and Wachtell, Lipton, Rosen & Katz and Hogan & Hartson LLP served as legal advisors to The Mills. Credit Suisse and Brookfield Financial Real Estate Group served as financial advisors and Sidley Austin LLP served as legal advisor to Brookfield.
About The Mills Corporation
The Mills Corporation, based in Chevy Chase, MD, is a developer, owner and manager of a diversified portfolio of retail destinations, including regional shopping malls and market-dominant retail and entertainment centers. It currently owns 38 properties in the United States totaling approximately 47 million square feet. The Mills is traded on the New York Stock Exchange under the ticker: MLS. For more information, visit The Mills' website at themills.com. |
