COLLEGE PARK, Md. — Mall operator Simon Property Group Inc. and hedge fund Farallon Capital Management said Friday they will buy struggling mall developer The Mills Corp. for $1.64 billion after outbidding rival Brookfield Asset Management Inc.
Mills has 38 malls nationwide, many of them massive regional shopping centers like Potomac Mills in Virginia, Arundel Mills near Annapolis and Sawgrass Mills in Florida. But the company has struggled in recent years after a decade of rapid growth.
Simon and Farallon offered $25.25 per share in cash for Chevy Chase-based Mills, higher than the $1.56 billion, or $24 per share, tender the partnership made earlier this month.
Mills said Friday it has terminated a previous $1.35 billion, $21 per share agreement it reached in January with Brookfield, a Canadian conglomerate.
Mills said Tuesday that it favored the higher Simon-Farallon proposal, but gave Brookfield three days to come up with a better deal.
A spokeswoman for the Toronto-based Brookfield did not immediately return a phone message seeking comment.
Many Wall Street analysts believed Indianapolis-based Simon, the nation's largest mall operator with 285 properties in the United States, was a better fit for Mills than Brookfield, which owns timber, power and commercial real estate but has no retail presence in North America.
"The Mills properties are an excellent strategic fit with our existing retail assets," David Simon, chief executive of Simon, said in a statement.
Including Mills' debt, the Simon-Farallon deal is worth $7.9 billion. The tender offer for Mills stock was expected to begin before the end of February and close after 45 days.
Mills said its board of directors unanimously approved the deal with Simon and Farallon.