Equity Office Properties Trust (NYSE:EOP) today announced that it
has signed a definitive merger agreement to be acquired by
Blackstone Real Estate Partners, an affiliate of The Blackstone
Group, in a transaction valued at approximately $36 billion. Under
the terms of the agreement, Blackstone will acquire all of the
outstanding common stock of Equity Office for $48.50 per share in
cash. The purchase price per share represents an 8.5% premium over
Equity Office�s closing share price on November 17, 2006, and a
20.5% premium over the company�s three-month average closing price.
Equity Office intends to pay its regular quarterly common share
dividend for the quarter ending December 31, 2006, but, under the
terms of the agreement, not for any quarter thereafter. Equity
Office�s Board of Trustees has unanimously approved the merger
agreement and has recommended the approval of the transaction by
Equity Office�s common shareholders. Completion of the transaction,
which is currently expected to occur in the first quarter of 2007,
is contingent upon customary closing conditions and the approval of
Equity Office�s shareholders, who will be asked to vote on the
proposed transaction at a special meeting that will be held on a
date to be announced. The transaction is not contingent on receipt
of financing by Blackstone. Neither Management nor the Trustees of
Equity Office are participants in the buying group. Blackstone has
agreed that, as promptly as practicable after the completion of the
merger, it will liquidate the surviving corporation in the merger
into a Blackstone affiliate. In the liquidation, each holder of a
share of the 5.25% Series B Cumulative Preferred Stock will receive
$50.00 per share in cash plus any then accumulated but unpaid
dividends, and each holder of a share of the 7.75% Series G
Cumulative Redeemable Preferred Stock will receive $25.00 per share
in cash plus any then accumulated but unpaid dividends. The common
limited partnership interests in Equity Office�s operating
partnership will be acquired for $48.50 per unit in cash. Qualified
holders of common limited partnership interests will be given the
option (in lieu of cash) to elect to receive preferred units of
limited partnership interest in the partnership following the
merger. It is expected that tender offers and consent solicitations
will be made with respect to the company�s unsecured
non-exchangeable debt securities except for certain redeemable
issues with small outstanding principal amounts, which are expected
to be redeemed. �We�ve built a great company -- epitomized by the
caliber of our employees, the quality of our assets and the markets
where we operate,� said Richard Kincaid, president and CEO of
Equity Office. �Our ultimate goal has always been to maximize
shareholder value, and we believe we have done that through this
transaction with The Blackstone Group, one of the world�s premier
private equity firms. The value created by this transaction
reflects the hard work and dedication of our employees who have
driven our success over the past 10 years.� �We are extremely
excited about this landmark transaction with Equity Office, which
represents the largest private equity deal in history,� said
Jonathan D. Gray, senior managing director of The Blackstone Group.
�We believe that the skills and strengths of Equity Office will
greatly enhance our existing office platform, which has been
expanded through our recent acquisitions of CarrAmerica and
Trizec.� Merrill Lynch & Co. acted as exclusive financial
advisor to Equity Office. Goldman, Sachs & Co., Bank of
America, Bear Stearns, Blackstone Corporate Advisory and Morgan
Stanley acted as financial advisors to Blackstone. Acquisition
financing will be led by Goldman, Sachs & Co., Bank of America,
and Bear Stearns. Sidley Austin LLP acted as legal advisor to
Equity Office. Simpson Thacher & Bartlett LLP acted as legal
advisor to Blackstone. About Equity Office Equity Office Properties
Trust, operating through its various subsidiaries and affiliates,
is the nation�s largest publicly held office building owner and
manager with a total office portfolio consisting of whole or
partial interests in 580 buildings comprising 108.6 million square
feet in 16 states and the District of Columbia. Equity Office has
an ownership presence in 24 Metropolitan Statistical Areas (MSAs)
and in 100 submarkets, enabling it to provide a wide range of
office solutions for local, regional and national customers. For
more company information visit the Equity Office website at
http://www.equityoffice.com. About The Blackstone Group The
Blackstone Group, a global private investment and advisory firm,
was founded in 1985. The firm has raised a total of more then $67
billion for alternative asset investing of which almost $13 billion
has been for real estate investing. The firm has a long track
record of investing in office buildings, hotels and other
commercial properties. The Real Estate Group has approximately 40
experienced professionals who have a deep understanding of real
estate across all product classes and geographic areas. In addition
to Real Estate, The Blackstone Group's core businesses include
Private Equity Investing, Corporate Debt Investing, Hedge Funds,
Mutual Fund Management, Private Placement, Marketable Alternative
Asset Management, and Investment Banking Advisory Services. Further
information is available at http://www.blackstone.com.
Forward-Looking Statements This press release contains certain
forward-looking statements based on current Equity Office
management expectations. Those forward-looking statements include
all statements other than those made solely with respect to
historical fact. Numerous risks, uncertainties and other factors
may cause actual results to differ materially from those expressed
in any forward-looking statements. These factors include, but are
not limited to, (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; (2) the outcome of any legal proceedings that may be
instituted against Equity Office and others following announcement
of the merger agreement; (3) the inability to complete the merger
due to the failure to obtain shareholder approval or the failure to
satisfy other conditions to completion of the merger, including the
receipt of shareholder approval and the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976; (4) the failure to obtain the necessary debt financing
arrangements set forth in commitment letters received in connection
with the merger; (5) risks that the proposed transaction disrupts
current plans and operations and the potential difficulties in
employee retention as a result of the merger; (6) the ability to
recognize the benefits of the merger; (7) the amount of the costs,
fees, expenses and charges related to the merger and the actual
terms of certain financings that will be obtained for the merger;
and (8) the impact of the substantial indebtedness incurred to
finance the consummation of the merger; and other risks that are
set forth in the �Risk Factors,� �Legal Proceedings� and
�Management Discussion and Analysis of Results of Operations and
Financial Condition� sections of Equity Office�s SEC filings. Many
of the factors that will determine the outcome of the subject
matter of this press release are beyond Equity Office�s ability to
control or predict. Equity Office undertakes no obligation to
revise or update any forward-looking statements, or to make any
other forward-looking statements, whether as a result of new
information, future events or otherwise. Additional Information
About the Merger and Where to Find It In connection with this
proposed transaction, the company will file a proxy statement with
the Securities and Exchange Commission (SEC). SHAREHOLDERS ARE
URGED TO READ THE PROXY STATEMENT FILED WITH THE SEC CAREFULLY AND
IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final
proxy statement will be mailed to the company�s shareholders. In
addition, shareholders will be able to obtain the proxy statement
and all other relevant documents filed by the company with the SEC
free of charge at the SEC�s Web site www.sec.gov or from Equity
Office Properties Trust, Investor Relations at Two North Riverside
Plaza, Suite 2100, Chicago, Illinois, 60606, (312) 466-3300.
Participants in the Solicitation The company�s trustees, executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from the
shareholders of the company in favor of the proposed transaction.
Information about the company and its trustees and executive
officers, and their ownership of the company�s securities, is set
forth in the proxy statement for the 2006 Annual Meeting of
Shareholders of the Company, which was filed with the SEC on April
17, 2006. Additional information regarding the interests of those
persons may be obtained by reading the proxy statement when it
becomes available. Equity Office Properties Trust (NYSE:EOP) today
announced that it has signed a definitive merger agreement to be
acquired by Blackstone Real Estate Partners, an affiliate of The
Blackstone Group, in a transaction valued at approximately $36
billion. Under the terms of the agreement, Blackstone will acquire
all of the outstanding common stock of Equity Office for $48.50 per
share in cash. The purchase price per share represents an 8.5%
premium over Equity Office's closing share price on November 17,
2006, and a 20.5% premium over the company's three-month average
closing price. Equity Office intends to pay its regular quarterly
common share dividend for the quarter ending December 31, 2006,
but, under the terms of the agreement, not for any quarter
thereafter. Equity Office's Board of Trustees has unanimously
approved the merger agreement and has recommended the approval of
the transaction by Equity Office's common shareholders. Completion
of the transaction, which is currently expected to occur in the
first quarter of 2007, is contingent upon customary closing
conditions and the approval of Equity Office's shareholders, who
will be asked to vote on the proposed transaction at a special
meeting that will be held on a date to be announced. The
transaction is not contingent on receipt of financing by
Blackstone. Neither Management nor the Trustees of Equity Office
are participants in the buying group. Blackstone has agreed that,
as promptly as practicable after the completion of the merger, it
will liquidate the surviving corporation in the merger into a
Blackstone affiliate. In the liquidation, each holder of a share of
the 5.25% Series B Cumulative Preferred Stock will receive $50.00
per share in cash plus any then accumulated but unpaid dividends,
and each holder of a share of the 7.75% Series G Cumulative
Redeemable Preferred Stock will receive $25.00 per share in cash
plus any then accumulated but unpaid dividends. The common limited
partnership interests in Equity Office's operating partnership will
be acquired for $48.50 per unit in cash. Qualified holders of
common limited partnership interests will be given the option (in
lieu of cash) to elect to receive preferred units of limited
partnership interest in the partnership following the merger. It is
expected that tender offers and consent solicitations will be made
with respect to the company's unsecured non-exchangeable debt
securities except for certain redeemable issues with small
outstanding principal amounts, which are expected to be redeemed.
"We've built a great company -- epitomized by the caliber of our
employees, the quality of our assets and the markets where we
operate," said Richard Kincaid, president and CEO of Equity Office.
"Our ultimate goal has always been to maximize shareholder value,
and we believe we have done that through this transaction with The
Blackstone Group, one of the world's premier private equity firms.
The value created by this transaction reflects the hard work and
dedication of our employees who have driven our success over the
past 10 years." "We are extremely excited about this landmark
transaction with Equity Office, which represents the largest
private equity deal in history," said Jonathan D. Gray, senior
managing director of The Blackstone Group. "We believe that the
skills and strengths of Equity Office will greatly enhance our
existing office platform, which has been expanded through our
recent acquisitions of CarrAmerica and Trizec." Merrill Lynch &
Co. acted as exclusive financial advisor to Equity Office. Goldman,
Sachs & Co., Bank of America, Bear Stearns, Blackstone
Corporate Advisory and Morgan Stanley acted as financial advisors
to Blackstone. Acquisition financing will be led by Goldman, Sachs
& Co., Bank of America, and Bear Stearns. Sidley Austin LLP
acted as legal advisor to Equity Office. Simpson Thacher &
Bartlett LLP acted as legal advisor to Blackstone. About Equity
Office Equity Office Properties Trust, operating through its
various subsidiaries and affiliates, is the nation's largest
publicly held office building owner and manager with a total office
portfolio consisting of whole or partial interests in 580 buildings
comprising 108.6 million square feet in 16 states and the District
of Columbia. Equity Office has an ownership presence in 24
Metropolitan Statistical Areas (MSAs) and in 100 submarkets,
enabling it to provide a wide range of office solutions for local,
regional and national customers. For more company information visit
the Equity Office website at http://www.equityoffice.com. About The
Blackstone Group The Blackstone Group, a global private investment
and advisory firm, was founded in 1985. The firm has raised a total
of more then $67 billion for alternative asset investing of which
almost $13 billion has been for real estate investing. The firm has
a long track record of investing in office buildings, hotels and
other commercial properties. The Real Estate Group has
approximately 40 experienced professionals who have a deep
understanding of real estate across all product classes and
geographic areas. In addition to Real Estate, The Blackstone
Group's core businesses include Private Equity Investing, Corporate
Debt Investing, Hedge Funds, Mutual Fund Management, Private
Placement, Marketable Alternative Asset Management, and Investment
Banking Advisory Services. Further information is available at
http://www.blackstone.com. Forward-Looking Statements This press
release contains certain forward-looking statements based on
current Equity Office management expectations. Those
forward-looking statements include all statements other than those
made solely with respect to historical fact. Numerous risks,
uncertainties and other factors may cause actual results to differ
materially from those expressed in any forward-looking statements.
These factors include, but are not limited to, (1) the occurrence
of any event, change or other circumstances that could give rise to
the termination of the merger agreement; (2) the outcome of any
legal proceedings that may be instituted against Equity Office and
others following announcement of the merger agreement; (3) the
inability to complete the merger due to the failure to obtain
shareholder approval or the failure to satisfy other conditions to
completion of the merger, including the receipt of shareholder
approval and the expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; (4) the
failure to obtain the necessary debt financing arrangements set
forth in commitment letters received in connection with the merger;
(5) risks that the proposed transaction disrupts current plans and
operations and the potential difficulties in employee retention as
a result of the merger; (6) the ability to recognize the benefits
of the merger; (7) the amount of the costs, fees, expenses and
charges related to the merger and the actual terms of certain
financings that will be obtained for the merger; and (8) the impact
of the substantial indebtedness incurred to finance the
consummation of the merger; and other risks that are set forth in
the "Risk Factors," "Legal Proceedings" and "Management Discussion
and Analysis of Results of Operations and Financial Condition"
sections of Equity Office's SEC filings. Many of the factors that
will determine the outcome of the subject matter of this press
release are beyond Equity Office's ability to control or predict.
Equity Office undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise. Additional Information About the Merger and Where to
Find It In connection with this proposed transaction, the company
will file a proxy statement with the Securities and Exchange
Commission (SEC). SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT FILED WITH THE SEC CAREFULLY AND IN ITS ENTIRETY WHEN IT
BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. The final proxy statement will be
mailed to the company's shareholders. In addition, shareholders
will be able to obtain the proxy statement and all other relevant
documents filed by the company with the SEC free of charge at the
SEC's Web site www.sec.gov or from Equity Office Properties Trust,
Investor Relations at Two North Riverside Plaza, Suite 2100,
Chicago, Illinois, 60606, (312) 466-3300. Participants in the
Solicitation The company's trustees, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from the shareholders
of the company in favor of the proposed transaction. Information
about the company and its trustees and executive officers, and
their ownership of the company's securities, is set forth in the
proxy statement for the 2006 Annual Meeting of Shareholders of the
Company, which was filed with the SEC on April 17, 2006. Additional
information regarding the interests of those persons may be
obtained by reading the proxy statement when it becomes available.
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