Equity Office Rejects Vornado Bid, Affirms Support for Blackstone

Equity Office Properties Trust said Friday its board of trustees voted to reaffirm support for a $54 a share takeover offer from private equity firm Blackstone Group, despite a higher bid from Vornado Realty Trust .

The board of Equity Office, the largest U.S. office landlord, said the $56 a share cash-and-stock offer from Vornado "fails to adequately compensate Equity Office shareholders for the increased risk when compared to the Blackstone transaction."

The board said it has been advised that it would likely take about four to six months to close the Vornado deal because of the requirement for a Vornado shareholder vote and the potential for review by the Securities and Exchange Commission.

Given this time delay, the board has been advised that the net present value of the Vornado offer is between $54.28 and $54.88 a share, even after taking into account the receipt of dividends in the interim, Equity Office said.

In contrast Blackstone's all-cash offer, whose closing conditions have largely been satisfied, could close on or about Feb. 9, Equity Office said.

"The board of Equity Office believes that the Blackstone transaction has certainty of value and virtual certainty of closing in the immediate future," Equity Office said in a statement.

A special shareholder meeting to vote on the Blackstone deal remains scheduled for Feb. 5, Equity Office said. It added however that it expects the meeting will be immediately adjourned until Feb. 7, in order to give shareholders sufficient time to review and consider the supplemental proxy materials.

The vote would then be taken on Feb. 7 and the deal would close on or about Feb. 9, Equity Office said.