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Equity Office shareholders approve Blackstone buyout offer of $23B

Equity Office Properties Trust shareholders overwhelmingly approved a $23 billion all-cash buyout offer Wednesday from the private equity firm Blackstone Group, sealing the deal on an acquisition that ended with a down-to-the-wire bidding war.

Company officials, who favored Blackstone’s $55.50 per share proposal over a rival bid of cash and stock from suitor Vornado Realty Trust, said the acquisition will be completed Friday.

They said more than 92 percent of ballots cast during the vote supported the acquisition.

‘We’re incredibly proud of all the hard work that’s gone into building Equity Office,’ CEO Richard Kincaid said after voting ended.

The Blackstone deal had the support of Equity Office trustees, even though it was less than the $56 per share in cash and shares offered by Paramus, N.J.-based Vornado.

Vornado’s bid had been deemed too risky by Chicago-based Equity Office because of the length of time it would take to complete and the need for Vornado shareholder approval.

Vornado withdrew its $23.2 billion offer hours before the vote, saying the premium it would have to pay to top Blackstone’s offer wouldn’t be in the interest of its shareholders.

Bidding for Equity Office began in November when 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-per-share cash-and-stock offer valued at $20.4 billion, and Blackstone fought back with its $54-per-share bid.

Vornado sweetened its bid twice more, but never succeeded in wooing the nation’s largest publicly traded office landlord. Equity Office owns more than 580 buildings totaling more than 105 million square feet nationwide.

Its properties include WorldWide Plaza in Manhattan and the Civic Opera building in Chicago.

The deal would be the second-largest private equity buyout in history, excluding debt. The largest was the $25.1 billion acquisition of RJR Nabisco Inc. in 1998 by the investment group Kohlberg Kravis Roberts & Co.

Including assumed debt, Blackstone values the all-cash deal at $39 billion, which the research firm Dealogic says would make it the largest private equity buyout ever when debt is included in the valuation.

Vornado shares climbed $7.60, or 6 percent, to $134.60 in afternoon trading on the New York Stock Exchange. Equity Office shares fell 58 cents to $55.47.