Reckson Sticks With SL Green

Reckson Associates(RA Quote) rejected a buyout bid from financier Carl Icahn, instead choosing to proceed with its planned deal with SL Green(SLG Quote).

Reckson said Tuesday that its board determined that the proposal from Icahn's American Real Estate Partners(ACP Quote) raised "significant financial and legal issues."

Icahn offered to buy the office landlord using $1 billion of cash and $3.3 billion in a new class of preferred ACP stock. That proposal came after Icahn's partners Mack-Cali (CLI Quote) and Macklowe Properties dropped out of an all-cash bid over the weekend.

Icahn said his new offer was valued at $49 a share if the preferred units were valued at par, but it was questionable whether the stock would really be worth that much.

Indeed, in rejecting the bid, Reckson said that "there are substantial valuation issues associated with the securities being offered as part of the AREP proposal and that these securities could be valued at a substantial discount to par which would reduce the proposal's economic value."

SL Green's offer for the company is a cash-and-stock deal currently valued at about $46 a share. Reckson said a shareholder meeting to vote on the deal will take place as scheduled on Wednesday.