Published 3 February 2007
Equity Office Properties Trust said on Friday its board of trustees had unanimously reaffirmed recommendation of the proposed US54/share all-cash takeover by affiliates of the Blackstone Group, in preference to a new $US56 cash & scrip bid from Vornado Realty Trust.
The Blackstone bid started at $US48.50 and Vornado initially came in at $US52/share. Vornado made its latest offer on Thursday, the day after Equity Office reported substantially better quarter & annual earnings than those for its 2005 downturn.
US sources price the current bids at $US38.3 billion (Blackstone), $US41 billion (Vornado). Vornado’s offer is $US31 cash & the balance in Vornado shares. The Equity Office board said it could take 4-6 months to close the Vornado transaction because it would require a Vornado shareholder vote and might be reviewed by the Securities & Exchange Commission. Given this time delay, the board had been told the net present value of the Vornado offer was between $US54.28-54.88/share, even after taking into account the receipt of dividends in the interim.
A special meeting of Equity Office shareholders to vote on the Blackstone proposal remains scheduled for Monday 5 February but will probably be adjourned to Wednesday 7 February (11am Chicago time). If the Blackstone bid’s approved it would close on Friday 9 February.
For the fourth quarter 2006, Equity Office reported net income available to common shareholders of $US313 million ($US19 million in 2005) & diluted earnings of US87c/share (US5c). For the full year, the company reported net income of $US307 million ($US8.1 million) & diluted earnings of US86c (US2c).
Equity Office has about 585 properties containing 10.1 million mÂ² in 16 states & Washington.
Attribution: Company release, story written by Bob Dey for this website.