The Mills Corp. is being slammed with another lawsuit in the never-ending saga to determine the fate of the company. This time from would-be savior Gazit-Globe Ltd., on Nov. 8, filed a suit with the Delaware Court of Chancery, demanding that Mills hold its annual stockholder meeting and appoint Gazit-Globe nominees to its board of directors.
In October, the company, led by Equity One CEO Chaim Katzman, purchased 9 percent of Mill's outstanding stock and offered Mills $1.2 billion for a re-capitalization.
Since the lawsuit was filed, Mills Corp. announced plans to hold a shareholder meeting on Dec. 21.
In his meetings with Mills's CEO Mark Ordan, Katzman claimed a re-capitalization, as opposed to a sale, would better serve the interests of Mills's shareholders by giving Mills time to finish in-progress projects and raise its market value. But Ordan balked at Katzman's request that Mills disclose its financial information to Gazit-Globe before it becomes public without a confidentiality agreement. “Gazit's actions are designed to advance Gazit's own interests and disrupt Mills's ability to effectively explore the company's strategic alternatives,” Ordan wrote in his SEC report. “It is simply not in the best interests of the Mills shareholders to conduct a bidding process that restricts some participants and not others.”
Another shareholder, Farallon Partners LLC, which controls 10.9 percent of Mills stock, reached a standstill agreement with Mills that prevents it from launching an unwanted bid for Mills through March 30, 2007.
In other Mills news, the company in mid-November released occupancy and tenant sales results for the past three years. As of Sept. 1, occupancy at its portfolio was 87.9 percent, down from 89.5 percent at the same time last year. Meanwhile, tenants posted sales of $391 per square foot, up from $372 per square foot in 2005.
Meanwhile, Mack-Cali Realty Corp., Mills's partner in the Meadowlands Xanadu project, is planning to sell its stake in the initial phase of the development to Colony Capital. Mack-Cali will sell its share in the project for $22.5 million, at a 30 percent discount to what it paid.