Vornado Trumps Blackstone's Equity Office Offer

Vornado Realty Trust raised its bid for Equity Office Properties Trust to about $41 billion in cash and stock, topping Blackstone Group LP's $38.3 billion offer in the competition for the biggest real estate takeover ever.

Vornado offered $56 a share for the largest office landlord in America, compared with Blackstone's all-cash bid of $54. New York-based Blackstone said yesterday in a statement that it doesn't plan to raise the offer, which Equity Office directors accepted on January 25. Shareholders are scheduled to vote on Monday.

The fight for Chicago-based Equity Office pits Steven Roth, 65, Manhattan's biggest commercial landlord, against Stephen Schwarzman, 59, who has helped lead about $160 billion of leveraged buyouts. They are vying for the largest collection of office properties in America with a combined 103 million square feet in 543 buildings.

"The Vornado offer is superior and potentially better than cash," a manager of 29 million Equity Office shares and 6.8 million Vornado shares for Cohen & Steers Capital Management in New York, James Corl, said. "If Blackstone comes back at $58, we'll give them a big hug. Right now, we'll give Vornado a big hug."