Poetic Business Moguls Compete in Bidding War

"We think the price is probably too high," said Morningstar analyst Arthur Oduma, who called Blackstone's bid superior to Vornado's. "We don't know why anyone would pay such a huge premium, but there are certain considerations. … In just one fell swoop, you get a portfolio that took many years to build up."

The Blackstone deal had the support of Equity Office trustees, even though it was less than the $56 per share offered by Vornado.

That bid had been deemed too risky by Chicago-based Equity Office because of the length of time it would take to complete and the need for Vornado shareholder approval.

In January, Vornado, joined by Starwood Capital Group and Walton Street Capital LLC, topped Blackstone's initial bid and offered Equity Office $52 per share.

Blackstone fought back with its $54-per-share bid, and Vornado sweetened its bid twice before retreating Wednesday.

Kincaid said he expected that Blackstone's increased bid would force the firm to sell more Equity Office buildings. He also expected higher rents for tenants.

"We're incredibly proud of all the hard work that's gone into building Equity Office," Kincaid said. "We built a phenomenal company."

Citing unnamed sources, the Wall Street Journal reported Wednesday that Blackstone had already arranged to sell several New York buildings to a private landlord for $7 billion. Blackstone officials declined to comment on the report.

Equity Office's Beginnings

Equity Office was founded in 1976 by the company's now-chairman Sam Zell. Since its initial public offering in 1997, the company has nearly quadrupled in size to become the nation's largest publicly traded owner and manager of commercial office space.

Zell, who was ranked No. 52 on Forbes' most recent list of the wealthiest Americans, stands to make about $1.1 billion in the deal, according to a review of regulatory documents reviewed by The Associated Press.

Equity Office owns more than 580 buildings, totaling more than 105 million square feet nationwide.

Vornado shares traded at an all-time high Wednesday, climbing $8.75, or 6.9 percent, to end at $135.75 on the New York Stock Exchange. Equity Office shares fell 60 cents to close at $55.45.

The AP contributed to this report.

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