REIT Bidding War Emerges

It's not clear what happens next. Morgan Stanley and its partners have the right to match any higher offers before Town & Country can change its mind about the deal. The deadline for such a move is three days from Thursday, according to a person familiar with the situation.

The Essex bid expires at 1 p.m. EST Wednesday. The offer is definitive, and Essex and its partners have agreed to pay the $20 million breakup fee to Morgan Stanley if they win.

The Berkshire bid is being coined a "proposal" and not a definitive offer. Berkshire says it will submit a formal offer within 21 days of beginning due diligence.

All bids also include pro-rata payments of Town & Country's dividends, which explains why the company's shares were trading above $37 after Essex's $36 bid was announced.

Town & Country shares closed Thursday at $38.64, up 5%, or $1.88.