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REIT To Consider Another Takeover Bid


Equity Office Properties, which agreed in November to be bought by a private equity company, the Blackstone Group, for $36 billion, including debt, said yesterday that it would begin discussions with a rival group that has offered to top that price.

Equity Office, the nation’s largest office landlord, with 585 buildings in 24 metropolitan areas, also said it would open its books to the challengers, a consortium led by Vornado Realty Trust.

Raising the stakes in what was already the largest buyout battle ever, Vornado and its partners, Starwood Capital Group and Walton Street Capital, proposed last week to pay $52 a share for Equity Office, or 7.2 percent more than what Blackstone has offered. Vornado, a real estate investment trust that owns more than 100 million square feet of office, retail and showroom property, said its offer would include about $10.6 billion of its stock.

Setting a Jan. 31 deadline for the Vornado group to submit a formal proposal, Equity Office said it continued to recommend approval of the Blackstone merger.

A Blackstone spokesman, John Ford, had no comment, except to point out that the Blackstone deal could close three days after Equity Office shareholders approve the transaction. The vote is scheduled for Feb. 5.

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