Published 11 February 2007
Equity Office Properties Trust got a last-minute challenge to its privatisation proposal on Tuesday, took the Blackstone privatisation scheme to shareholders on Wednesday anyway and got 92% approval, and on Friday said the $US39 billion merger of the trust & its operating partnership with affiliates of Blackstone Real Estate Partners had been completed.
Also on Friday, $US7 billion of the portfolio â€“ 8 Manhattan commercial buildings containing 600,000mÂ² â€“ was sold to Macklowe Properties.
Vornado Realty Trust had upped its bid to $US60/share, but with more hooks and a longer timeframe than the immediate Blackstone deal, which had been raised to $US55.50 cash/share. Blackstone had begun the formal merger process at $US48.50/share. Earlier negotiations which didn’t evolve into formal proposals were at much lower figures.
Vornado wasn’t prepared to raise again or change the cash-&-scrip form of its bid or other conditions, and withdrew its offer shortly before Wednesday’s meeting.
Blackstone’s successful bid was based on paying $US23 billion for Equity Office’s equity plus $US16 billion for the assumption of debt. To do this, Blackstone’s investors will stump up about $US4 billion in equity, leaving about $US35 billion to be met from a number of debt providers â€“ a 90% debt ratio.
New York newspaper reports indicate the selldown will be in a range of retail debt structures, including bonds & mezzanine loans, and that Blackstone habitually turns over its portfolios faster than Equity Office did.
Attribution: Company releases, SEC filings, NY Sun, story written by Bob Dey for this website.