Vornado submits $38 bn counter-bid for Equity Office

The prospect of the largest bidding war in the history of the real estate has moved one step closer after a group led by Vornado Realty Trust, the second largest real estate investment trust in the US, submitted a $38 bn (EUR 26 bn) counter-bid for peer Equity Office Properties, the largest office landlord in the country.

Vormado and its partners, Barry Sternlicht of Starwood Capital Group Global and Neil Bluhm of Walton Street Capital, said the offer is a 7.2% premium on the takeover bid of $20 bn in equity and $16 bn in debt assumption proposed by private equity group Blackstone late last year.

Blackstone's offer was said to be the largest takeover bid in the real estate history. The new offer of cash and shares comes to $52 a share, compared with Blackstone's $48 a share.

Sam Zell, the billionaire founder of Equity Office, has already had the Blackstone offer approved by the board and a shareholders' vote is scheduled for 5 February. The board said it will consider the new offer as soon as practical. Blackstone has indicated it thinks its offer is superior and it does not intend to increase its bid.