The Mills Responds to Gazit-Globe's Revised Recapitalization Proposal

  
    
  
  
    
      The Mills Corporation (NYSE:MLS) responded today to a revised version of 
      Gazit-Globe’s conditional proposal to invest 
      in a recapitalization of The Mills.
    
    
      The Mills again welcomes Gazit-Globe and its chairman, Chaim Katzman, to 
      participate in The Mills’ ongoing exploration 
      of strategic alternatives. The Mills’ 
      management and Board of Directors have repeatedly invited Gazit-Globe to 
      enter that process by signing a confidentiality and standstill agreement 
      on terms similar to those agreed to by numerous other interested 
      parties, including one of The Mills’ largest 
      shareholders. The Board of Directors is considering all possible 
      alternatives that would enhance shareholder value, and in that light 
      would like to evaluate a Gazit-Globe proposal that is fully informed by 
      due diligence in order to compare it against any other proposals that 
      The Mills may receive from other bidders.
    
    
      Unfortunately, Gazit-Globe has repeatedly refused to agree to the ground 
      rules that the Board has set, and other very credible suitors are 
      following, to ensure a fair, orderly and competitive process. As a 
      consequence, Gazit has put itself in a position where it is unable to 
      review all relevant information necessary to submit a fully informed, 
      unconditional proposal. Gazit-Globe’s current 
      revised proposal, like its previous offer, is highly conditional and 
      subject to completion of due diligence that is has refused to begin.
    
    
      The Board, informed by its discussions with management and its advisors, 
      has numerous specific concerns about Gazit-Globe’s 
      highly conditional proposal, including among others:
    
    
      
        The fact that the proposal requires the completion of a due diligence 
        investigation of The Mills – which 
        Gazit-Globe has so far refused to commence due to their refusal to 
        sign an appropriate confidentiality and standstill agreement; and
      
      
        The fact that Gazit-Globe’s proposal, as 
        currently structured, would give Mr. Katzman control of the Company, 
        leaving public shareholders with both an unprotected minority position 
        and no opportunity to receive a control premium.
      
    
    
      All other interested parties have engaged in a due diligence process. 
      Without carefully reviewing the diligence information that has been 
      provided to all other potential bidders, Gazit-Globe will not be able to 
      produce an unconditional offer in the same timeframe as other bidders. 
      Access to The Mills’ diligence information 
      has repeatedly been offered to Mr. Katzman on the condition that 
      Gazit-Globe sign an appropriate confidentiality and standstill agreement.
    
    
      The Mills believes that Gazit-Globe can best address its concerns by 
      joining the strategic alternatives process and developing a fully 
      informed proposal that can be compared on a level playing field against 
      other potential proposals. Numerous well-capitalized potential buyers 
      have already substantially completed due diligence and are waiting for 
      the restated financials to submit their final bids. The Mills’ 
      strategic alternatives process is deliberate, well considered and well 
      advised and the Company believes it will deliver maximum value to The 
      Mills’ shareholders. By contrast, The Mills 
      believes that Gazit-Globe’s actions and 
      initiation of litigation only disrupt the orderly conclusion of the 
      strategic alternatives process and frustrate the best interests of its 
      shareholders.
    
    
      The Mills has recently taken numerous actions to streamline the Company 
      and prepare it for a strategic transaction. A few of the recent 
      accomplishments include:
    
    
      
        the restructuring of the Meadowlands Xanadu partnership to eliminate 
        The Mills’ financial obligations;
      
      
        the sale of The Mills’ international assets 
        which enabled the Company to reduce its Senior Term Loan by 
        approximately $458 million and simplify its organizational structure;
      
      
        the sale of non-core development projects such as the office and 
        residential portion of 108 North State Street and Mercati Generali; and
      
      
        changing virtually all of the senior management team, including the 
        CEO and CFO.
      
    
    
      These actions were accomplished in close coordination with The Mills’ 
      Board and members of the Special Committee who are assisting the Company 
      in its strategic alternatives process.
    
    
      The Audit Committee of the Board has been working extensively with its 
      outside auditors at Ernst & Young LLP, and with its special legal 
      counsel at Gibson, Dunn & Crutcher LLP, to complete the restatement of 
      The Mills’ financials and the related 
      investigation into the Company’s historic 
      accounting practices. When that process is complete, the Company intends 
      to move forward rapidly to complete its strategic alternatives process 
      and request final proposals from interested parties. The Mills would 
      very much like Gazit-Globe to be one of the final bidders in this 
      process, and once again invites Gazit-Globe to sign a confidentiality 
      and standstill agreement and participate in the process to achieve value 
      for all The Mills’ shareholders.
    
    
      About The Mills Corporation
    
    
      The Mills Corporation, based in Chevy Chase, MD, is a developer, owner 
      and manager of a diversified portfolio of retail destinations, including 
      regional shopping malls and market-dominant retail and entertainment 
      centers. It currently owns 39 properties in the United States totaling 
      approximately 48 million square feet. The Mills is traded on the New 
      York Stock Exchange under the ticker: MLS. For more information, visit 
      the Company's website at www.themills.com.
    
    
      Statements in this press release that are not historical - including, 
      among other things, as to The Mills’ 
      exploration of strategic alternatives and other transactions and steps - 
      may be deemed forward-looking statements within the meaning of the 
      federal securities laws. Although The Mills believes the expectations 
      reflected in any forward-looking statements are based on reasonable 
      assumptions, The Mills can give no assurance that its expectations will 
      be attained or that the exploration of strategic alternatives will 
      result in any transaction and it is possible that our actual 
      circumstances and results may differ materially from those indicated by 
      these forward-looking statements due to a variety of risks and 
      uncertainties. The Mills undertakes no obligation to publicly update or 
      revise any forward-looking statements, whether as a result of new 
      information, future events or otherwise. The reader is directed to The 
      Mills’ various filings with the SEC, 
      including quarterly reports on Form 10-Q, reports on Form 8-K and its 
      annual reports on Form 10-K, for a discussion of such risks and 
      uncertainties.
    
  
The Mills Corporation (NYSE:MLS) responded today to a revised
version of Gazit-Globe's conditional proposal to invest in a
recapitalization of The Mills.

   The Mills again welcomes Gazit-Globe and its chairman, Chaim
Katzman, to participate in The Mills' ongoing exploration of strategic
alternatives. The Mills' management and Board of Directors have
repeatedly invited Gazit-Globe to enter that process by signing a
confidentiality and standstill agreement on terms similar to those
agreed to by numerous other interested parties, including one of The
Mills' largest shareholders. The Board of Directors is considering all
possible alternatives that would enhance shareholder value, and in
that light would like to evaluate a Gazit-Globe proposal that is fully
informed by due diligence in order to compare it against any other
proposals that The Mills may receive from other bidders.

   Unfortunately, Gazit-Globe has repeatedly refused to agree to the
ground rules that the Board has set, and other very credible suitors
are following, to ensure a fair, orderly and competitive process. As a
consequence, Gazit has put itself in a position where it is unable to
review all relevant information necessary to submit a fully informed,
unconditional proposal. Gazit-Globe's current revised proposal, like
its previous offer, is highly conditional and subject to completion of
due diligence that is has refused to begin.

   The Board, informed by its discussions with management and its
advisors, has numerous specific concerns about Gazit-Globe's highly
conditional proposal, including among others:

   --  The fact that the proposal requires the completion of a due
        diligence investigation of The Mills - which Gazit-Globe has
        so far refused to commence due to their refusal to sign an
        appropriate confidentiality and standstill agreement; and

   --  The fact that Gazit-Globe's proposal, as currently structured,
        would give Mr. Katzman control of the Company, leaving public
        shareholders with both an unprotected minority position and no
        opportunity to receive a control premium.

   All other interested parties have engaged in a due diligence
process. Without carefully reviewing the diligence information that
has been provided to all other potential bidders, Gazit-Globe will not
be able to produce an unconditional offer in the same timeframe as
other bidders. Access to The Mills' diligence information has
repeatedly been offered to Mr. Katzman on the condition that
Gazit-Globe sign an appropriate confidentiality and standstill
agreement.

   The Mills believes that Gazit-Globe can best address its concerns
by joining the strategic alternatives process and developing a fully
informed proposal that can be compared on a level playing field
against other potential proposals. Numerous well-capitalized potential
buyers have already substantially completed due diligence and are
waiting for the restated financials to submit their final bids. The
Mills' strategic alternatives process is deliberate, well considered
and well advised and the Company believes it will deliver maximum
value to The Mills' shareholders. By contrast, The Mills believes that
Gazit-Globe's actions and initiation of litigation only disrupt the
orderly conclusion of the strategic alternatives process and frustrate
the best interests of its shareholders.

   The Mills has recently taken numerous actions to streamline the
Company and prepare it for a strategic transaction. A few of the
recent accomplishments include:

   --  the restructuring of the Meadowlands Xanadu partnership to
        eliminate The Mills' financial obligations;

   --  the sale of The Mills' international assets which enabled the
        Company to reduce its Senior Term Loan by approximately $458
        million and simplify its organizational structure;

   --  the sale of non-core development projects such as the office
        and residential portion of 108 North State Street and Mercati
        Generali; and

   --  changing virtually all of the senior management team,
        including the CEO and CFO.

   These actions were accomplished in close coordination with The
Mills' Board and members of the Special Committee who are assisting
the Company in its strategic alternatives process.

   The Audit Committee of the Board has been working extensively with
its outside auditors at Ernst & Young LLP, and with its special legal
counsel at Gibson, Dunn & Crutcher LLP, to complete the restatement of
The Mills' financials and the related investigation into the Company's
historic accounting practices. When that process is complete, the
Company intends to move forward rapidly to complete its strategic
alternatives process and request final proposals from interested
parties. The Mills would very much like Gazit-Globe to be one of the
final bidders in this process, and once again invites Gazit-Globe to
sign a confidentiality and standstill agreement and participate in the
process to achieve value for all The Mills' shareholders.

   About The Mills Corporation

   The Mills Corporation, based in Chevy Chase, MD, is a developer,
owner and manager of a diversified portfolio of retail destinations,
including regional shopping malls and market-dominant retail and
entertainment centers. It currently owns 39 properties in the United
States totaling approximately 48 million square feet. The Mills is
traded on the New York Stock Exchange under the ticker: MLS. For more
information, visit the Company's website at www.themills.com.

   Statements in this press release that are not historical -
including, among other things, as to The Mills' exploration of
strategic alternatives and other transactions and steps - may be
deemed forward-looking statements within the meaning of the federal
securities laws. Although The Mills believes the expectations
reflected in any forward-looking statements are based on reasonable
assumptions, The Mills can give no assurance that its expectations
will be attained or that the exploration of strategic alternatives
will result in any transaction and it is possible that our actual
circumstances and results may differ materially from those indicated
by these forward-looking statements due to a variety of risks and
uncertainties. The Mills undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The reader is directed to The
Mills' various filings with the SEC, including quarterly reports on
Form 10-Q, reports on Form 8-K and its annual reports on Form 10-K,
for a discussion of such risks and uncertainties.