Fidelity Emerges as 10.2% Holder
In Shopping-Center REIT Mills
Fidelity Investments has accumulated a 10.2% stake in Mills Corp., the shopping-mall real-estate investment trust, according to a filing with the Securities and Exchange Commission.
The filing Friday follows another one Thursday, which disclosed that hedge funds run by Brian J. Stark and Michael A. Roth had acquired a 6.4% stake in Mills, and intend to talk to management about its policies. Earlier in the week, Vornado Realty Trust said it has had informal discussions with Mills about buying all or part of the company.
Mills has been shopping itself around after several missteps, including accounting restatements, earnings-report delays and write-offs of projects that have sent the Arlington, Va., company's shares reeling and forced it to scramble to find money to fund its aggressive development pipeline.
In 4 p.m. composite trading on the New York Stock Exchange, Mills stock edged up 15 cents to $40.15 a share.
Fidelity now has a stake of 5.73 million shares in Mills, up from 1.48 million shares on Dec. 31, according to Thomson Financial. A Fidelity spokeswoman declined to comment on its filing. Mills also declined to comment.
Fidelity is the second-biggest holder of Mills shares behind Cohen & Steers Capital Management Inc., New York, which has a 13.2% stake. But Fidelity's accumulation is more likely owing to the stock's low price compared with the past summer, not to gain control of the company, said Greg Andrews, a REIT analyst with Green Street Advisors of Newport Beach, Calif.
In its filing Thursday, the investor group comprised of Messrs. Stark's and Roth's hedge funds, said it may "seek control or otherwise influence the management" of Mills in the future. The group's stake is 3.63 million shares. The funds are Shepherd Investments International, Stark Trading and Stark International.
Mills, which hired Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. earlier this year to explore selling itself, has 42 malls totaling 51 million square feet, mostly in the U.S. Its potentially lucrative development pipeline includes a $1.2 billion retail and entertainment complex called Xanadu that is under construction in the New Jersey Meadowlands.
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