Mills Asks Suitors to Step
Forward by June 13

Mills Corp. added a bit of clarity to its situation at the International Council of Shopping Centers annual convention in Las Vegas this week. The mall real-estate investment trust, which has put itself up for sale amid a slew of problems, said yesterday that it is requesting initial expressions of interest by June 13, and that its Meadowlands, N.J., Xanadu project will cost more and take longer than it forecast.

The Arlington, Va., company emerged from months of near-silence to tell analysts and investors that its exploration of "strategic alternatives" is on track with much interest from potential buyers, 30 of whom have signed confidentiality agreements in order to look at the company's books. But several people who have seen Mills's books say they are in some disarray, making it difficult to get a handle on what the company might be worth.

Banc of America Securities analyst Ross Nussbaum said in a report that Mills itself says it is still trying to determine its value, but will have a better idea in the next week. Mills's Chief Operating Officer Mark Ordan, in an interview from Mills's bustling booth at the convention, said, "We did not say we didn't know the value of the company." He said that, "the process is going along fine on schedule."

Also, in a filing yesterday with the Securities and Exchange Commission, Mills said the internal investigation into its accounting problems will be completed in the "next month or two" and that it will file its long-delayed 2005 earnings report by the end of the summer.

In meetings with several analysts, Mills's board said it was solidly behind Chief Executive Larry Siegel.

Mills has been hurt by missteps in recent months largely stemming from accounting problems that have forced it to restate earnings and delay earnings reports. It has slashed its big development pipeline and laid off much of its development staff, and is exploring a sale of all or part of the company. The increased transparency evident at the ICSC convention could bolster investor confidence in the company.

A partnership of hedge funds run by Brian J. Stark and Michael A. Roth increased its ownership in Mills to 8.7%, according to an SEC filing Tuesday. That is up from 7.5% in March.

In the SEC filing, Mills said it closed on most of its previously announced financing from Goldman Sachs Mortgage Co. and used the proceeds to pay off several loans. Mills said it has $387 million left over to help pay for running the company.

Mills also said that the $1.2 billion Xanadu project would be delayed as much as a year, and that it would cost more and yield less than Mills had projected, though it wouldn't say by how much.

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