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Blackstone beat rival bidders including Morgan Stanley Real State (MS.N) which had teamed up with Starwood Capital Group and New York-based NRDC, the source said.

Blackstone agreed to pay book value for the assets which Centro has valued at around $9.4 billion, the source said, confirming media reports.

Shares in Centro were earlier placed in a trading halt ahead of an announcement about a potential transaction. Centro narrowed down bidders for the U.S. shopping mall assets to three consortiums, including Blackstone, sources told Reuters on February 9. with final bids for the 600 U.S. properties due in late February.

The Australian property giant was also weighing up a number of potential outcomes for a company-wide restructuring. The company's total portfolio is valued at A$16.5 billion, while it has A$16 billion in debt.

Debt-laden Centro was one of corporate Australia's first casualties of the global credit crisis.

Any asset sales need the approval of Centro's lenders which are now largely made up of hedge and distressed debt funds.

UBS and JPMorgan are running the sale process for Centro. Moelis & Co is financial adviser to Centro.

A Centro spokeswoman declined to comment.

Officials for Blackstone were not immediately available to comment.

The source could not be named because they were not authorized to speak to the media about the matter.

(Reporting by Michael Smith; Editing by Ed Davies)

London crude prices rose by more than $2 at one point to $114.50 a barrel as worsening turmoil in Libya spurred fresh concern about disruptions to oil production.

Recent unrest in the Middle East pushed London crude prices to nearly $120 last week, their highest level since August 2008, exacerbating worries about inflationary pressures in emerging Asian economies.

Market players said emerging Asian stock markets may continue to underperform compared to developed markets such as Japan and the United States.

Underscoring the recent trend, MSCI's index of Japanese shares .MIJP00000PJP rose 1 percent, taking its gains for far in 2011 to nearly 6 percent, while its Indonesian index has shed some 7.5 percent .MIID00000PID.

"There are strong concerns about inflation based on excessive liquidity and emerging markets have been hurt more by this," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Tokyo.

"Developed countries...are not raising interest rates while emerging markets are in the midst of doing so. That is negative for (emerging market) equities and that trend will probably still continue," Akino added.

The Nikkei .N225 recouped early losses to end 0.9 percent higher on Monday, with some traders attributing the bounce to futures-led buying on a weaker yen against the euro and to month-end window dressing. .T

Some Japanese financial shares saw strong gains with Mizuho Trust & Banking Co Ltd (8404.T) jumping 6 percent after a source told Reuters that its parent Mizuho Financial (8411.T) planned to buy it out along with two other units.

MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.2 percent after hitting three-month lows last week on worries that anti-government protests would spread to other Middle East oil producing countries. The ex-Japan index has lost more than 3 percent so far this year.

Part of the divergence with developed markets likely reflects position unwinding, said Adrian Foster, head of financial markets research with Rabobank International in Hong Kong.

Late last year, massive liquidity driven rallies in global equity markets helped give a boost to emerging market shares, Foster said.

"That largely explains why (emerging) equity markets this year have been quite weak. Just the unwinding of these... particularly in India and also in Indonesia," Foster added.

A growing aversion to risky assets in the week to February 23 fueled the biggest flows to global bond funds in more than three months, and turned more investors away from emerging market stocks, according to fund tracker EPFR Global.

With more than $20 billion leaving emerging market stock funds since mid-January, it is the longest period of outflows since the financial crisis deepened in September 2008.

Crude prices creeping back into the triple digits have sparked concern about slower economic growth and will no doubt reignite two long-running monetary policy debates:

Should central banks have a single inflation-fighting mandate, as the ECB does, or dual goals of price stability and full employment, like the Fed?

Should policymakers focus on headline inflation rates or strip out volatile food and energy prices?

Fed Chairman Ben Bernanke can expect questions on both topics when he delivers his twice-yearly testimony to Congress on Tuesday and Wednesday.

A day later, the ECB holds its policy-setting meeting and will have to judge whether oil prices pose an immediate threat when year-over-year inflation is already above its target. Economists widely expect the ECB to hold rates steady, but they will be hanging on President Jean-Claude Trichet's every word for clues on whether he is leaning toward a hike soon.

Nigel Gault, chief U.S. economist with IHS Global Insight in Lexington, Massachusetts, said persistently high oil prices would curb consumer spending and drive up the still-lofty jobless rate -- which would make the Fed less inclined to raise interest rates.

"The inflation-phobic European Central Bank might react differently, which may explain why the euro has been rising in recent days," Gault said.

Indeed, back in mid-2008, when oil prices briefly approached $150 a barrel, the ECB raised rates while the Fed held steady.

DUAL MANDATE

In his testimony, Bernanke will probably give Congress an economic assessment that sticks closely to his recent comments that the recovery is strengthening but still not enough to bring about a significant improvement in the job market.

He may also repeat a warning he gave earlier in February that sharp cuts in government spending now could harm the recovery. Republicans in Congress have pressed for deep cuts while Democrats want to keep spending at current levels.

If the parties cannot agree on a spending bill by Friday, the federal government will run out of money for nonessential operations and be forced to close.

Between the spending debate and oil prices, lawmakers will have no shortage of controversial topics for Bernanke. Pricey oil will draw questions on whether the Fed has overstimulated the economy and planted the seeds of runaway inflation.

Bernanke was already under pressure from some in Congress who want to restrict the Fed to a single mandate of price stability. Bernanke has said in the past that the Fed was not seeking any change in its mandate but would "honor" any decision Congress made.

Following the S&P 500's worst week in 15 last week, investors are trying to determine whether the predictions of a correction have been fulfilled or if there's still downside ahead as oil prices remain at elevated levels.

Shares could find some support Monday after positive commentary from Berkshire Hathaway Inc (BRKa.N) Chairman Warren Buffett, who said in his annual letter that Berkshire will engage in record capital spending in the coming year.

"They're certainly encouraging, especially for U.S. investing. I was struck by the level of capital investing he cited," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Whether or not his remarks result in a Monday (rally) remains to be seen. Buffett is a long-term investor, not a timer. He tends to be early."

Along with the direction of oil, potential market movers this week for traders will be the February payrolls report, which will be released on Friday, and Federal Reserve Chairman Ben Bernanke's speech on Tuesday.

The benchmark S&P index fell 1.7 percent last week, a relatively mild pullback for an index that has gained more than 25 percent since the start of September.

"We were looking for a pullback of at least 5 percent and we didn't get it, so I don't think we can expect a lot of new entrants at these levels," said Leo Grohowski, who oversees about $166 billion in assets as chief investment officer at BNY Mellon Wealth Management in New York.

"With the gains we've had, and since tensions remain high in the Middle East, I don't expect to see aggressive buying on the dip this time around," Grohowski said.

A lack of new entrants could mean lighter volume, which could leave the market more susceptible to increased volatility. Lately, volume has been stronger on down days in the market.

"RISKIER" ENVIRONMENT

An unexpected surge in crude prices, sparked by Libya's popular uprising, pressured equities for much of the holiday-shortened previous week on concern that higher energy costs could stifle economic activity.

U.S. crude futures spiked as much as 20 percent during the week to a high of $103.41 per barrel, although they later fell below $100. The CBOE Volatility Index VIX .VIX rose 17 percent last week and at one point was up 30 percent.

Though many say the market remains overstretched, its resilience in the face of geopolitical uncertainty and some disappointing data has some encouraged.

Judy Moses, portfolio manager at Evercore Wealth Management in San Francisco, said that the week's drop had quieted some of the calls for consolidation.

"Had we not seen this pullback, our enthusiasm would be a little tapered because valuations would be fuller," she said. "But it does seem that in general the investment environment is a bit riskier now."