EOP: Blackstone still in poll position

The board of trustees of Sam Zell’s Equity Office Properties has voted in favor of backing Blackstone’s takeover of the company.

In a statement issued today, Equity Office said its financial and legal advisers had studied an improved offer submitted by a Vornado-led consortium yesterday equating to $2 per share more than Blackstone’s offer.

However, it said it was reaffirming support for Blackstone because it offered greater security and less delay. Blackstone’s all-cash offer can be completed on February 9, whereas Vornado’s cash and shares bid could take between four and six months to conclude. This is because Vornado’s shareholders would have to vote on the deal and because of the potential for an SEC inquiry, it said.

“Given this time delay, the board has been advised that the net present value of the Vornado offer is between $54.28 and $54.88 per share, even after taking into account the receipt of dividends in the interim,” the statement said.

“The approximately 1 percent higher net present value of the Vornado offer fails to adequately compensate Equity Office shareholders for the increased risk when compared to the Blackstone transaction.”

Equity Office shareholders are due to meet on February 5, but the meeting is likely to be immediately adjourned to give investors a further two days to the consider merits of the competing bids.