Vornado Realty Makes Bid For Equity Office Properties

Vornado Realty Trust, Starwood Capital Group Global LLC, and Walton Street Capital made a $52 a share cash and stock offer for Sam Zell's Equity Office Properties Trust, topping an offer from Blackstone Group LP.

The group announced the proposal in a statement yesterday on Vornado's Web site. The offer for Equity Office, the largest office landlord in America, exceeds Blackstone's bid of $48.50 a share. Blackstone's bid is worth $36 billion including debt.

The Vornado group and Blackstone are vying to gain control of a real estate investment trust that owns or has a stake in 543 buildings from New York to Los Angeles as American vacancy rates drop and rents climb to a record. Mr. Zell, who became a billionaire by assembling the properties, is selling as Equity Office has struggled with buildings in weak markets such as Atlanta.

Shares of Equity Office rose $1.09 to $50.94 at 4:07 p.m. in New York Stock Exchange composite trading. The shares have risen above the Blackstone offer price on speculation a new bid would emerge. Vornado shares slid $3.38 to $122.55.

The Wall Street Journal earlier reported the Vornado group's bid.

New takeover proposals are emerging for the company amid a deadline Thursday for Equity Office bondholders to receive a consent payment as part of the Blackstone deal. Blackstone also has the right to best any rival bid. Shareholders are scheduled to vote on the Blackstone bid on February 5.