Search
 

Did Blackstone Overpay?

'You're seeing a little spread between what private equity and public investors can pay for REITs.'

By Melissa Kress | Updated on February 16, 2007

Comments by: Royal Shepard Industry Analyst Standard & Poor’s Equity Research New York City

As the ink dries on yet another public-to-private play, the $39-billion price tag on the Blackstone-EOP merger begs the question, did Blackstone pay too much? The price skyrocketed past Blackstone’s original $36-billion offer after Vornado’s competing offer fueled a bidding war–only to see Vornado backed out of the race at the 11th hour. According to last week’s Feedback Poll, 46% feel Blackstone overpaid for the Chicago-based office REIT. On the other hand, given today’s market, 54% didn’t blink an eye. Commentator Shepard falls in with the latter.

“You have to keep in mind that there were two very sophisticated investors that were bidding for EOP. They had access to the books and they are smart. You have to assume they have a pretty good taste for the cash flow they’re going to be getting for those properties. You have to take that into account when considering whether they overpaid or not.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.