Please ensure Javascript is enabled for purposes of website accessibility

Blackstone Group raises bid for Equity Office by about 2 percent

Equity Office Properties Trust said Tuesday that private equity firm Blackstone Group raised its cash takeover bid to about $23 billion, the latest volley in a bidding war for the real estate company.

Equity Office Properties said the new Blackstone bid was unanimously approved by its board, which recommended shareholders vote for the deal at a special meeting Wednesday morning.

Blackstone’s new bid is for $55.50 per share, up from its previous offer of $54 a share, or $22.3 billion, and just a shade below the $56 a share in cash and stock being offered by rival bidder Vornado Realty Trust.

Including assumed debt, Blackstone said its latest offer is valued at $39 billion.

The private equity firm’s latest offer is the latest development in a bidding war for Chicago-based Equity Office, nation’s largest publicly traded owner and manager of office properties.

Vornado Realty Trust announced Sunday it would pay the cash portion of its $23.24 billion bid upfront to address concerns about the speed and certainty of its offer.

The Equity Office board said the net present value of Vornado’s $56-per-share bid is in the range of $54.81 to $55.07 per share, even after taking into account the receipt of dividends in the interim.

It said Vornado’s latest offer still contained too much risk and the Paramus, N.J.-based real estate investment trust had failed to address ‘significant contractual issues.’ A Vornado spokesman could not immediately be reached for comment Tuesday morning.

In conjunction with the increased cash offer, Equity Office said Blackstone raised the termination fee to $720 million from $500 million.

If approved, the Blackstone deal could close as early as Friday.

The bidding for Equity Office began in November when New York-based Blackstone agreed to buy the real estate company for $20 billion, or $48.50 per share.

Vornado, which joined Starwood Capital Group and Walton Street Capital LLC, countered with a $52-a-share cash-and-stock offer valued at $20.4 billion, and Blackstone fought back with its sweetened $54-per-share bid.

Last week, Vornado boosted its cash-and-stock offer to $56 per share, topping Blackstone’s bid, before offering an upfront tender offer to buy up to 55 percent of Equity Office’s shares for $56 in cash, then complete a follow-on merger.

That tender offer would begin about three weeks after Equity Office signed a final agreement and would close 20 business days later. The acquisition would close about 3 1/2 months after signing.

Equity Office owns more than 590 buildings totaling more than 105 million square feet nationwide.