Simpson Thacher and Sidley act on largest buyout in history

Simpson Thacher & Bartlett and Sidley Austin last week landed roles on the latest private equity-backed mega-deal, which is set to break a slew of records.

Marquee Simpson Thacher client Blackstone launched a $36bn (£19bn) bid for the US’s biggest landlord Equity Office Properties Trust (EOP), making it the largest buyout in history.

Blackstone’s acquisition beats Kohlberg Kravis Roberts’ (KKR) buyout of hospital chain HCA this summer for $33bn (£17.4bn). KKR is also a Simpson Thacher client.

On the EOP buyout, corporate partner Brian Stadler and real estate head Greg Ressa led the team at Simpson Thacher. EOP’s largest shareholder is still the company founder, Chicago tycoon Sam Zell.

EOP had been grooming itself recently for a possible buyout, shedding both properties in its portfolio and more than 360 jobs.

Blackstone will pay $20bn (£10.55bn) and assume $16bn (£8.44bn) in debt for EOP, which owns 580 buildings in 16 states. The offer’s terms see Blackstone pay $48.50 (£25.58) a share for the New York Stock Exchange-listed company.

Acquisition financing will be led by Goldman Sachs, Bank of America and Bear Stearns. Cleary Gottlieb Steen & Hamilton is advising Goldman Sachs.

In the past two and a half years Simpson Thacher has advised Blackstone on deals with an aggregate value of $76bn (£30.1bn).

Most recently the firm advised Blackstone on its joint $4.8bn (£2.53bn) acquisition of Trizec Properties, which owns Manhattan’s Grace Building, where Baker & McKenzie is a tenant.