Equity Office opens its books to Vornado group

Equity Office opens its books to Vornado-led consortium as it plans a $37.6 billion counter-offer.

US real estate business Equity Office has opened its books to the real estate consortium looking to trump The Blackstone Group’s agreed $36 billion (€28 billion) bid.

Equity Office said its board had directed management to enter into discussions with the rival group, which includes Vornado Realty Trust, Starwood Capital and Walton Street Capital. The two sides have already met to discuss the potential bid, which would value the company at $52 per share, and the consortium has now begun due diligence with a view to submitting a definitive proposal by January 31.

This is just five days before a meeting scheduled to allow shareholders to vote on Blackstone’s $36 billion offer, which the company’s board accepted in November last year. Equity Office said it had not changed its recommendation of the offer, which values the company at $48.50 per share.

It also stressed that the discussions with the consortium, known as Dove Parent, may not lead to a definitive offer, and even if it did that would not necessarily result in the board changing its current recommendation.

Blackstone believes that the rival offer, which consists of 60 percent cash and 40 percent in Vornado shares, is inherently more risky than its own all-cash offer, according to a source close to the firm.

Equity Office shares closed down 36 cents on Monday at $52.15.