Wednesday, January 17, 2007

Reit mania goes into extra innings.. vornado tops blackstone offer for eop

wow. an higher offer than the already very very high blackstone offer. but with lots of overvalued stocks (40%) making up a big portion of the new bid i would go with the blackstone offer. remember the days back in 1999 when all the big tech mergers were in stocks

wahnsinn. ein noch höheres angebot als das schon extrem teure from blackstone. da dieses mal ein großer teil (40%) in aktien daherkommt würde ich wohl immer noch die cashvariante von bs bevorzugen. bei mir kommen da unweigerlich erinnerungen an die großen aktienbasierten übernahmen 1999 hoch.

here is one more link that questioned the rational behind this mania / mehr zum wahnsinn

Vornado's Equity Office Bid Puts Onus on Blackstone to Counter
Jan. 18 (Bloomberg) -- Vornado Realty Trust's $21.6-billion bid for Equity Office Properties Trust, the biggest U.S. office landlord, puts pressure on Blackstone Group LP to increase its $20-billion offer for the company, investors said.

Vornado yesterday teamed with Starwood Capital Group Global LLC and Walton Street Capital LLC to offer $52 a share for Chicago-based Equity Office, topping Blackstone's $48.50-a-share offer, accepted by Equity Office's board on Nov. 19.

..... ``Both have provisions for a higher bid. What you're going to see is a battle of rhetoric.''

Blackstone lobbed the first verbal round late yesterday, calling Vornado's offer ``inferior'' because it's 40 percent in stock, whose value can change. Blackstone's offer is all cash......( in the blackstone the headache could be ahead for the bondholders, if vornado will succeed i think the stockholders will face the headache....../ sollte blackstone gewinnen könnten die anleihebesitzer kopfschmerzen bekommen, bei vornado wohl eher die aktieninhaber....)

Biggest in History
Blackstone officials declined to comment on the possibility the firm would revise its bid. Either offer for Equity Office, including assumed debt of about $16 billion, would be the largest leveraged buyout in history...... (with yields at all time lows that makes sense ..../ mit mietrendieten nahe allzeittiefs macht das wirklich sinn......)read this fantastic report from mike larson about the reits and the yields. bitte diesen bericht unbedingt lesen)
The value of Equity Office's assets is rising because demand is growing and space is scarce with little new construction in markets such as New York, Los Angeles and San Francisco. During the past four years, replacement costs for office buildings have soared from 50 to 100 percent on average in the six largest urban markets, (no wonder after the biggest run up ever in real estate overall..../nach dem größten run für immobilien im allgemeinen kein wunder....).

`Up Cycle'
``The office market is in the up cycle in terms of fundamentals,' ..... ``Demand is healthy, supply is limited, vacancy is coming down, rents are coming up and income is expanding.''

Yet another bidder may emerge, ...... ``Anything is possible. Everybody has money to put to work.''

Vornado's stock is 42 percent more valuable than it was a year ago. With dividends, it has returned 47.5 percent during the past 12 months, closing at $122.55 yesterday. Equity Office shares rose $1.09 to $50.94.

Vornado has a possible advantage in that its status as a public company may mean it doesn't have to redeem Equity Office's bonds, reducing its purchase price accordingly, Ostrower said. Today is the deadline for Equity Office bondholders to receive a consent payment as part of the Blackstone deal. ......

Less Debt
Vornado's part-stock offer also means the investor group won't have to borrow as much to finance its bid, .....

``The debt they're assuming is considerably less than in Blackstone's bid,'' ........
disclosure: will probably go short the reits during this week

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