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EOP Update

The battle royale for office landlord Equity Office Properties Trust continues. Last night, Blackstone Group boosted its original bid by 11% after a Vornado Realty Trust-led group offered $21.5 billion for EOP late last week. Blackstone is now offering roughly $38.3 billion (including debt) for the office giant. The Chicago-based office REIT has given the Vornado group until next Wednesday to make another bid.

EOP originally agreed to pay Blackstone a $200 million breakup fee if the deal is terminated. If EOP doesn’t accept this current offer from Blackstone, however, the REIT will be required to pay a $500 million breakup fee. If the deal is closed, it would represent the largest buyout (by dollar value) in U.S. history.

On Tuesday night, NREI asked readers to send in their thoughts about this massive takeover battle. Here are some of the responses:

“There is no doubt that this trophy will go to the Dove Parent group led by Vornado and their partners. The Vornado track record has proven them to be proficient in every sector of real estate. The leadership of its chairman and president are a dynamic duo that makes this REIT smart investors and excellent operators of real estate. This is a combination that few, if any, other REIT can claim. The Vornado team possesses the book knowledge and street smarts that it takes to become an industry leader that others dream to emulate.” — Jeffrey Levy

“Here are [my] economics on the +/- 100 million sq. ft. Both firms could monetize certain of the facility expense using the following template from the mergers and acquisitions market, where contracting companies are bought and sold. The footage is located in low, medium, and high cost markets, where cleaning and other facility service work is priced accordingly. So, both Blackstone and Vornado could put another $275 million on the table.” — Richard Hutchinson


We’d like to hear from you. Will Blackstone’s sweetened offer ultimately win EOP? Or will this heated bidding war go into another round? Email your thoughts to [email protected]

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