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Equity Office Properties Rejects Vornado Offer

Vornado Realty Trust was dealt an apparent setback today as Equity Office Properties Trust (EOP) rejected a $41 billion buyout bid from the Paramus real estate investment trust. Chicago-based EOP issued its statement after consulting with its financial and legal advisors about Vornado’s $56 a shareVornado Realty Trust (NYSE:VNO) was dealt an apparent setback today as Equity Office Properties Trust (EOP) rejected a $41 billion buyout bid from the Paramus real estate investment trust. Chicago-based EOP issued its statement after consulting with its financial and legal advisors about Vornado’s $56 a share offer, which was raised from an initial proposal of $52 a share on Jan. 17.

EOP said its board voted unanimously to reaffirm support for a rival bid from an affiliate of New York City private equity firm The Blackstone Group. EOP said Blackstone’s $54-a-share offer is all-cash and would likely close around Feb. 9. By contrast, said EOP, Vornado’s bid, which is $31 in cash and $25 in stock, is riskier, since the value of the offer could be reduced if Vornado stock falls below $115. EOP said that it would likely take four to six months to close the Vornado deal, which would need shareholder approval and possibly an SEC review.

EOP expects to file a proxy statement supplement today explaining the reasons for its decision. It will reschedule its vote on the Blackstone agreement from Feb. 5 to Feb. 7 to allow shareholders time to review and consider the supplemental proxy materials.

Shares of Vornado were down $0.76 to $124.98 this afternoon.

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