Blackstone Group has raised its bid for
Equity Office Properties Trust
to $55.50 a share in cash in an attempt to seal the buyout deal this week.
In a statement, Equity Office's board unanimously recommended that the company's shareholders vote on Feb. 7 to approve the merger with Blackstone. In recent days, Equity Office shareholders have also been weighing a $56 cash-and-stock takeover offer from
Vornado Realty Trust
Equity Office's board has argued that Vornado's bid carries more risk since it will take several months to close and requires the approval of Vornado's shareholders.
To appease these concerns, Vornado offered on Monday to pay the cash portion of its bid in the form of a tender for Equity Office shares, which could be completed about three weeks after Equity Office agreed to a merger.
Unless Vornado raises its bid in coming days, Blackstone looks set to win the battle for Equity Office. Equity Office's board said that despite repeated requests, Vornado has failed to address significant contractual issues the board identified.
Should Equity Office shareholders approve the Blackstone merger, it would likely close Feb. 9. In conjunction with the increased Blackstone bid, any higher bidder would have to pay Blackstone a termination fee of $720 million, up from the previous fee of $500 million.