In a bidding war that continues to heat up, Vornado Realty Trust published a press release yesterday evening in which it offered to accelerate payment of the cash portion of its offer for Equity Office Properties Trust, a REIT with the largest commercial real estate holding in the U.S. Despite outbidding private equity group Blackstone's $54-a-share all-cash bid of by two dollars with a combined cash and share offer, Equity Office's board swiftly rejected Vornado's latest offer, expressing concerns that Vornado's offer would take months to close. Vornado returned with a guarantee that it would pay the cash portion of its offer within three weeks of the deal closing, meaning shareholders would begin to reap the benefits of its offer almost immediately; the stock portion of the deal would be paid upon the deal's completion which Vornado estimates would take 3 and a half months after signing. Equity Office's shareholders were supposed to vote today over which deal they preferred but the company has now delayed that vote to Wednesday to allow both of its bidders to sweeten their offers. The deal also still requires a majority vote by Vornado shareholders.
Sources: Press Release, Wall Street Journal, NY Times, Reuters/NY Times
Commentary: Vornado Outbids Blackstone (Again) in Fight For Equity Office Properties, Equity Office Properties: Sam Zell's Genius, ISS Advises Equity Office Shareholders to Accept Blackstone's Bid
Stocks/ETFs to watch: Equity Office Properties Trust (EOP), Vornado Realty Trust (NYSE:VNO). Competitors: Boston Properties Inc. (NYSE:BXP), Mack-Cali Realty Corp. (NYSE:CLI). ETFs: iShares Cohen & Steers Realty Majors (NYSEARCA:ICF), Vanguard REIT Index ETF (NYSEARCA:VNQ), WisdomTree Dividend Top 100 (NYSEARCA:DTN), streetTRACKS DJ Wilshire REIT (NYSEARCA:RWR)
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