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NEW YORK: Another real estate bidding war though on a much smaller scale than the recently concluded $39 billion battle over Equity Office Properties could well be under way.

Spurning Brookfield Asset Management, its original merger partner, Mills, the problem-plagued owner of discount shopping and entertainment centers and traditional malls, said Tuesday that it preferred the $1.56 billion offer it received from a partnership led by the Simon Property Group.

Simon, the nation’s largest mall operator, and Farallon Capital Management, a hedge fund that is the largest shareholder of Mills with a 10.8 percent stake, made the offer on Feb. 5.

The offer of $24 a share for Mills is $3 a share more than the bid from Brookfield, the owner of prime office buildings in New York, Washington, Toronto and other cities.

Brookfield’s bid was for $21 a share, or a total of $1.35 billion.

The board of Mills, which is based in Arlington, Virginia, concluded Tuesday that the offer from Simon was superior not just because of the higher price but also because of “the likelihood that the Simon/Farallon transaction could be completed more quickly than the Brookfield merger,” the company said.

Under the agreement between Mills and Brookfield, which was announced on Jan. 17, Brookfield has three days to make a counteroffer.

A Brookfield senior vice president, Katherine Vyse, said Tuesday that the company would have no comment.

If Brookfield bows out of the contest, it would receive a $40 million breakup fee from Simon and its partner, plus reimbursement for expenses.

Analysts said Tuesday that it would not be surprising if Brookfield came back with a higher offer.

“I wouldn’t rule it out that they will come back,” said Christopher Haley, an analyst at Wachovia Securities who covers Brookfield Asset Management.

Based in Toronto, Brookfield has $50 billion in assets, including hydroelectric plants and timberland, but it has said that buying Mills, which owns interests in 38 malls across the country, including Sawgrass Mills, near Fort Lauderdale, Florida, would give the company a foothold in the North American retail industry.

Brookfield’s retail holdings are limited to three shopping malls in Brazil.

“It’s a question of how badly do they want to get into the mall game?” said Keven Lindemann, the director of real estate for SNL Financial, a research company in Charlottesville, Virginia.

Haley of Wachovia pointed out that Simon and Brookfield were approaching the transaction from different perspectives. Simon, which owns all or part of 286 malls, sees the acquisition of Mills as a way to round out its portfolio, while Brookfield sees it as a new strategic initiative.

“Who is more aggressive in that case?” Haley said. “It’s hard for me to say.” But he said that it would be easier and less costly for Simon to absorb Mills into its existing structure because it would not essentially be creating a new business.

However the contest turns out, it is certain to be good news for shareholders of Mills, said Barry Vinocur, the editor of REIT Wrap, a daily newsletter.

On Aug. 2, 2005, Mills traded at $65.85 a share. On the day before the merger with Brookfield was announced, Jan. 16, shares of Mills closed at $17.77. They closed Tuesday at $26.24, up 49 cents.

“For the first time in a long time, this puts Mills shareholders in an enviable position,” Vinocur said.

Mohamed Zeyani is a baby-faced 27-year-old with slicked-back hair. He is also a new phenomenon in Muammar al Qaddafi’s Libya—an entrepreneur. With his 25-year-old brother Ali, Zeyani opened the Al Sahab Training Center three years ago in the up-and-coming Bin Ashour district of Tripoli. The center is now teaching English, computers, and business skills to about 130 employees of local companies and multinationals such as Occidental Petroleum Corp. ( ) and Italian oil giant ENI. “We chose the field of education because we felt there was a big need,” Zeyani says as he looks in on classrooms crowded with women in head scarves and young men in suede jackets. His annual revenues have already doubled, to $1 million, and he’s thinking of setting up an executive MBA program.

Entrepreneurs in Libya? Isn’t this the pariah state where everything is run by so-called peoples’s committees and until recently private property was severely restricted? The answer is that Qaddafi has wised up—at least partly. He began changing course a few years ago when oil prices were low. The Libyan economy was close to collapse after more than a decade of U.S. and U.N. sanctions brought on by his reckless actions, such as the 1988 bombing of Pan Am Flight 103 over Scotland. After the U.S. invaded Iraq and toppled Saddam Hussein in 2003, Qaddafi settled his differences with Washington and abandoned his weapons of mass destruction programs.

Since then, foreign oil companies have been piling into Libya, and Tripoli has started to revitalize the economy. Much of the progress is due to an unusual partnership with Harvard Business School professor and competitiveness guru Michael E. Porter, who is advising the Libyans through Boston consultancy Monitor Group. For the past two years, more than a dozen Monitor consultants have been working in Libya, studying the economy and running a three-month leadership program intended to create a new pro-business elite. So far, 150 Libyans have graduated. The people in the course “were real role models, starting businesses, contributing to society,” says graduate Yazid el Shaari, an engineer at Canadian-Libyan joint venture Veba Oil Operations.

Porter was persuaded to take the job by Qaddafi’s son, Saif al Islam. The former London School of Economics graduate student is a lean man who favors expensive European suits and Western-style economic reform. Since first meeting Saif at several dinners in London, Porter has traveled to Libya three times and met top government officials, including the elder Qaddafi. “I didn’t take this on because this is a big economy,” Porter said in an interview at Tripoli’s glitzy Corinthia Hotel. “It was very symbolic. If this can be successful, then other countries will be able to change.”

It’s a monumental task. Libya is behind the curve in just about everything. Moreover, the country’s economy is more dependent on oil and gas than just about any other. The industry, which employs only 3% of the workforce, accounts for over 60% of gross domestic product—a higher share than in either Saudi Arabia or Kuwait. Even though Qaddafi, who has ruled since 1969, is taking the chains off the private sector, unemployment is still estimated to be as high as 35%, and the streets of Tripoli are filled with loitering young men.

LOCATION, LOCATION
Yet there’s a buzz in the Libyan capital these days. Developers are eyeing the spectacular beaches west of the city, and real estate prices have doubled in the past year. “There is definitely an undercurrent of motion,” says Abdulla Boulsien, a London-based Libyan who is scouting real estate and IT deals for Tuareg Capital, a private equity fund set up to invest in Libya and Algeria.

Even if it’s not entirely open for business, Libya seems to be worth the trouble. After all, the country has oil and gas income approaching $40 billion per year, some $60 billion in the bank, and an attractive location across the Mediterranean from Sicily. So far, the biggest action is in energy. The Oasis Group—which includes ConocoPhillips, ( )Marathon Oil ( ), and Hess ( )—paid Tripoli $1.8 billion two years ago to return to the Libyan fields that the U.S. government forced them to give up in 1986.

Occidental Petroleum Corp. also reclaimed its old Libyan acreage in 2005, paying $133 million up front. The company was the big winner in the first of three auctions that the Libyans have held for new exploration rights in the past two years, paying $90 million and committing to an additional $125 million in investment. Exxon Mobil ( ) and Chevron have also picked up acreage in the auctions. And Royal Dutch Shell has agreed to a major gas deal. “We believe Libya will be a very interesting country to work in for the next five to ten years,” says Tawfiq A. Mohamed, chairman of ete-laf Oil Services Co., a Tripoli-based company that performs oilfield construction work.

More tourists, too, might be drawn to Libya. An hour east of Tripoli lies one of the world’s great ruined cities, Leptis Magna. Among the largest Roman settlements in Africa, it’s well-preserved and promises to be a key attraction. But getting a decent hotel room or a table at one of the better fish restaurants in Tripoli is a challenge. Oil companies have booked blocks of rooms permanently. And the U.S. Embassy, which reopened last year, is using a floor of the Corinthia as a temporary base while its diplomats find a building site.

The growing stream of businesspeople and visitors is gratifying to hotelkeeper Mohammed Mesbah. He runs the Zumit Hotel, a spectacular hostelry built next to a Roman arch dedicated to Marcus Aurelius in Tripoli’s old city. Mesbah recently spent about $400,000 renovating the colonnaded structure, which was built in 1816 to house traveling merchants. “I figured my vision may be four or five years ahead of its time,” says Mesbah. But he’s already fully booked on most nights.

REFORM ROADBLOCK
None of this means Libya is likely to turn into a new Dubai. Libyan society, which has lived for decades under Qaddafi’s revolutionary populism, probably isn’t ready for that degree of opening. “To change from a socialist culture to a private culture is a big project,” says Saleh Zahaf, a lawyer who advises would-be foreign investors. “It requires a generation.”

Porter complains that reform ground to a halt last year after Monitor recommended a big commitment to education and training and investment in energy, tourism, trade, and construction. One reason: a backlash against proposed layoffs of public-sector workers. A planned privatization of a public-sector bank called Sahara also failed when investors rejected the government’s valuation.

Qaddafi and his son needed more time to build consensus. Over the past year, they have gradually replaced hard-liners in the government. On Feb. 22, Porter joined Saif in Tripoli to announce the launch of a Libyan Economic Development Board designed to speed government decision-making and boost private enterprise. Saif also promised to more than double compensation for state employees, whose salaries have been frozen at low levels for years. (A typical engineer, for example, makes about $400 a month.) And while he wants to shrink the state sector by some 20%—or 180,000 workers—those who leave will be given three years’ salary, plus loans of $23,000 to start businesses. “We need to change from a state economy to an open economy,” Saif told reporters, “but without it being out of control.”

This balancing act is likely to continue as Libyans wait to see whether Qaddafi is truly serious about reform. “We are getting more comfortable, but lots of people don’t feel confident,” says one Libyan businessman. For decades, Qaddafi confiscated businesses and homes and treated enemies with brutality. Fear still lingers in the Tripoli air, and hotel rooms and restaurant tables are said to be bugged. Moreover, Saif isn’t the only Qaddafi son with his father’s ear. Saadi, a former professional soccer player, and Mohtassem, the chief of intelligence, also vie for influence.

But many business leaders believe the regime is finally listening. In 2003, a group was allowed to form a business council, which successfully lobbied for lower interest rates. Recently, council members prevented a project to build what they considered to be an overpriced flour mill that was backed by Maltese investors. Instead, a cheaper $15 million Libyan-backed facility got the green light. “We were kept out of [projects in] our country for years, and we want it back,” says Abdalla M. Fellah, a former council chief who will invest in the mill.

Foreign investors in Libya will have to reckon with such nationalistic sentiments, so future deals won’t come easily—just as nothing in Libya does. But the reward—a foothold in one of the world’s great oil producers—is well worth it, many foreign executives believe. As Mohamed Zeyani says: “Something is happening. It may be slow, but it is happening.”
READER COMMENTS

ROSWELL, N.M. - Businesses here have been cashing in on the UFO craze for years paintings and replicas of UFOs and space aliens adorn downtown buildings, and even the McDonalds and Wal-Mart are UFO- and space-themed.

Now city officials want to take it to another level with a UFO-themed amusement park, complete with an indoor roller coaster that would take passengers on a simulated alien abduction.

Nobody will be harmed and everybody will be returned, hopefully, in the same shape, concept designer Bryan Temmer said Friday.

The park, dubbed Alien Apex Resort, could open as early as 2010. The city has received a $245,000 legislative appropriation for initial planning, but the park would be privately built and managed. Requests for proposals will be advertised next month.

Grand plans
The proposed park initially will cover 60 to 80 acres with room to expand to 150 acres. It will feature other rides and attractions, including an exhibit hall with information on scientific exploration of the universe.

Its not just about the Roswell Incident and did it happen, said Temmer, of Land O Lakes, Fla.

The Roswell Incident, of course, has brought the southeastern New Mexico city worldwide acclaim. It centers on a purported UFO crash on a nearby ranch in July 1947, which the military later claimed was a top-secret weather balloon.

Temmer, who describes himself as a fan of theme parks and science fiction, pitched the concept to city leaders two years ago. I knew there was only one place on the planet, probably in the universe, where this idea would work, he said.

City Planner Zach Montgomery said the project will cost several hundred millions of dollars, but a more accurate figure hasnt been determined. A roller coaster similar to the one Temmer proposed is under construction at another theme park for almost $100 million, Montgomery said.

Build it and they will keep coming?
Montgomery said the city is considering six potential sites but declined to identify them, other than to say each is within city limits or could be annexed. He also wouldnt name potential operators, but said at least four major corporations approached about the idea are excited.

Some business owners believe the theme park is necessary to keep tourists returning.

Sharon Welz is a co-owner of the Roswell Space Center, a T-shirt and souvenir shop just off Main Street. She said visitors often complain theyd like to see and do more during trips to the town of about 50,000 people.

We would welcome something like an alien roller coaster or a theme park, absolutely, she said. How can it hurt us?

Montgomery agrees, saying the top complaint by tourists during the citys annual UFO festival each summer is that theres not enough to do.

The towns biggest tourism attraction is the International UFO Museum and Research Center, which has drawn 2.5 million visitors since opening in 1992. Beyond that, its largely boutiques like the one run by Welz.

Were still in the infancy of our UFO-related economic development, Montgomery said. Eventually, when people come to Roswell theyre not going to have enough time to do everything they want to do. Thats our goal. 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Charter (CHTR) is a buy off Tuesday’s market action, which saw stocks tank and bonds rise, Jim Cramer said on CNBC’s “Stop Trading!” segment.

Cramer said the big worry in the market, which had the Nasdaq down 3% and the Dow Jones Industrial Average off 2%, is the subprime crisis. Lenders have reported increasing defaults and delinquencies, leading to larger worries about the financial sector.

Cramer said the subprime meltdown and this morning’s 9% selloff in China point to a “worldwide slowdown” that will eventually force the Federal Reserve to cut interest rates. “This is the pain before the rate cuts,” he said.

Cramer said sentiment is likely to remain sharply negative throughout Tuesday and into Wednesday. But he said safe haven stocks, such as high-yielding defensive names including Procter & Gamble (PG) , Altria (MO) , Kellogg (K) and Coke (KO) , could start to draw some interest Wednesday.

He said the same is true of Bank of America (BAC) , which is 5% below its highs in spite of a huge buyback plan and a strong dividend. Cramer said money is likely to be funneled into companies with buybacks and dividends in coming days.

Cramer said cyclical stocks such as Caterpillar (CAT) , having run up sharply in recent weeks, “have a while to go” before they bottom out. But he suggests buying Charter, the debt-heavy St. Louis-based cable operator, into the teeth of the bond market rally, because falling interest rates give the company a chance to refinance and cut its interest costs.

Cramer also likes oil service plays, saying they have a strong long-term outlook.

March 13, 2007 — After getting plenty of television exposure, “American Idol” runner-up Katharine McPhee is turning to the silver screen to launch her self-titled debut.

McPhee’s record, which hit stores earlier this year, will be marketed in theaters across the country. On March 23, the music video for her first single, “Over It,” will premier on more than 5,000 screens.

Screenvision, a major in-theater ad company, will showcase the song along with two other tracks under an agreement with her record label, RCA Records/19 Recordings. Terms of the deal weren’t disclosed.

The campaign comes as the music industry, struggling with ever-declining CD sales, looks for new ways to get exposure for rookie recording artists like McPhee.

With MTV more interested in reality shows than music videos, the record labels are finding it even tougher to reach the college crowd.

Screenvision is more than happy to step in where MTV exited. Movie and music fans have a lot in common: both skew younger and are eager to be entertained.

A new study from Arbitron found that 81 percent of teens and 67 percent of you adults ages 18 to 24 had been to the movies in the past month. “We think that there is great overlap between the habits of the movie-going audience and the music listeners,” said Matthew Kearney, president and chief executive of Screenvision.

“It provides a great opportunity for us and for the record labels to promote their products and entertain the audience simultaneously.”

Screenvision will make McPhee’s music part of its pre-movie show, which weaves together entertainment clips and ads with the help of a host.

The program will also direct fans to McPhee’s Web site and offer them a code to text with their cell phones to download her ringtone and mobile updates.

Screenvision said McPhee’s is part of a new segment called “Featured Artist of the Month,” suggesting it plans to bring other music companies on board.

There’s good reason to be optimistic at a time when other traditional advertising is showing little or no growth, movie advertising is a bright spot.

Screenvision’s ad revenue topped $520 million in 2005, up almost 20 percent from $438 million the year before, according to the Cinema Advertising Council.