Vornado Realty Trust
backed down from its bid to purchase
Equity Office Properties
, clearing the way for Blackstone Group to acquire the office owner.
Vornado said Wednesday that the premium it would have to pay to top Blackstone's recently raised bid, in addition to an increased breakup fee, wouldn't be in its shareholders' best interest.
The move ends a back-and-forth battle between Vornado and Blackstone over what is set to be the largest real estate transaction in history. On Tuesday, Blackstone raised its purchase price for Equity Office for the second time to $55.50 a share in cash, and set a $720 million termination fee for its merger deal.
Vornado most recently had offered $56 a share in cash and stock for Equity Office, but that bid was seen as carrying more risk since it will take several months to close and requires Vornado shareholder approval.
Equity Office shareholders are set to vote on the Blackstone deal on Wednesday, and closing could occur by the end of the week.
Shares of Equity Office recently were trading down 51 cents to $55.54.