The private equity firm Blackstone Group on Thursday raised its offer to buy Equity Office Properties Trust by 11 percent to $22.3 billion, or $54 per share in cash, topping a rival bid from Vornado Realty Trust.

Including debt, the deal could be worth as much as $38 billion given $16.49 billion in debt reported as of Sept. 30.

The revised offer puts Blackstone, led by Stephen Schwarzman, in competition with Vornado Chairman Steven Roth to buy the company built by real estate mogul Sam Zell. Zell’s nickname is the “grave dancer” for his affinity for buying distressed assets.

Investors may be betting that Roth won’t back down. Shares of Equity Office rose $2.04, or 3.9 percent, to $54.74 — above the Blackstone offer — in afternoon trading on the New York Stock Exchange.

Shares of Vornado fell 28 cents, or 0.22 percent, to $124.37 on the NYSE.

The successful bidder will ultimately gain control over what Zell has developed into the nation’s largest publicly traded owner and manager of office properties at a time when the commercial real estate market remains strong.

The value of the new offer from Blackstone is calculated based on the number of outstanding common shares, stock options and Series B preferred shares to be converted that combine for a total of 413,442,174 shares.

Blackstone Group agreed in November to buy Equity Office in a deal valued at $20 billion, or $48.50 per share, but earlier this month Vornado Realty Trust joined Starwood Capital and Walton Street to submit a competitive bid of $52 per share, or $20.37 billion, 60 percent in cash and 40 percent stock.

Chicago-based Equity Office has set a Wednesday deadline for Vornado to raise its offer. Shareholders are scheduled to vote on Feb. 5 on the amended deal, which has been approved by Equity Office directors. The company said the transaction could close as soon as Feb. 8.

The termination fee on the deal was increased to $500 million under certain circumstances, up from $200 million previously. The termination fee doesn’t preclude a revised bid from Vornado.

This entry was posted on Friday, January 26th, 2007 at 12:18 am and is filed under Real Estate. Tags: Blackstone Group Chicago Equity Office Properties Equity Office Properties Trust New York New York Stock Exchange Real Estate real estate market real estate mogul Realty Sam Zell Starwood Starwood Capital Vornado Realty Trust . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.