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Mills Corp. Researches Sale

ARLINGTON, VA-The shopping mall REIT is considering selling, and taps JP Morgan Chase and Goldman Sachs Group to look into its options.

By Barbra Murray | Updated on February 16, 2006

ARLINGTON, VA-The Mills Corp., a shopping mall REIT specializing in large-scale retail and entertainment destinations, has called on JP Morgan Co. and Goldman Sachs Group Inc. to investigate a possible sale of the company, according to published reports. In a research report, Bank of America subsidiary Banc of America Securities LLC concludes that Mills is an “unlikely acquisition candidate.” Having been in business for more than two decades Mills oversees about 51 million sf of leasable space at 42 retail properties across the country and abroad.

Despite news of JP Morgan and Goldman Sachs’ involvement, BOAS stands firm in its belief that Mills is not a good buy at the moment and would not likely command a great deal of interest. “We continue to believe that a sale of the company is not imminent for the following reasons: 2005 audited financials are not yet available; there remains uncertainty surrounding the potential liability resulting from the SEC inquiry and shareholder lawsuits; and the uncertain outlook for Meadowlands Xanadu.”

Meadowlands Xanadu is a proposed 4.7 million-sf entertainment and retail destination in Bergen County, NJ. Mills, however, has targeted Meadowlands Xanadu as one of its projects in the pipeline that would be well positioned to increase shareholder value. BOAS has other ideas about Mills’ future. “We believe that partial asset sales are in the cards,” the report concludes. “While we don’t believe Mills is for sale, the company is still facing a liquidity issue. As such, we believe that Mills has retained these investment banks as advisors to assist in the disposition of joint venture stakes in individual assets within Mills’ portfolio.” A BOAS spokesperson was unavailable to comment by deadline, while a Mills spokesperson tells GlobeSt.com that the company is not commenting on the matter.

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