Blackstone Ups Offer In Buyout Bid

Blackstone Group LP increased its offer for Sam Zell's Equity Office Properties Trust to $38.3 billion to thwart Vornado Realty Trust in the world's biggest leveraged buyout.

Blackstone's offer for Chicago-based Equity Office is $54 a share in cash, 3.8% more than the $52-a-share cash and stock proposal from a group led by Vornado. Blackstone's earlier bid was $48.50 a share.

The contest for control of the largest American office landlord pits developer Steven Roth of Vornado against Blackstone's Stephen Schwarzman, a dealmaker who has helped lead $160 billion in leveraged buyouts. In raising its bid before Vornado can make a formal offer, Blackstone is looking to win approval from Equity Office shareholders in a February 5 vote.

"Blackstone is obviously trying to pre-empt board approval of the Vornado bid and preserve their No. 1 position," a manager for Cohen & Steers Capital Management in New York, James Corl, said.