Simpson Thacher scoops world’s biggest takeover

Simpson Thacher & Bartlett’s marquee private equity client Blackstone has emerged victorious in the battle to lead the world’s biggset takeover.

Blackstone had to table a $38.9bn (£19.8bn) bid to successfully acquire Sidley Austin client Equity Office Properties (EOP), America’s biggest commercial property group set up by Chicago entrepreneur Sam Zell.

Blackstone, which had made its original $36bn (£18.4bn) bid in November (see The Lawyer, 27 November), faced tough competition from rival private equity consortium comprising Vornado Realty Trust and Starwood Capital, and advised respectively by Sullivan & Cromwell and Wachtell Lipton Rosen & Katz.

Vornado’s entry into the bidding pushed the price up, and Blackstone were forced twice to raise their offer.

Vornado offered to buy in cash 55 per cent of EOP’s shares upfront at $56 (£28.60) per share, then complete a follow-on merger. But EOP preferred the safer option offered by Blackstone, at $55.50 (£28.30) in cash for all shares, up from their preliminary offer of $54 (£27.50) per share. Blackstone is also assuming $16bn (£8.7bn) in debt for EOP, which owns 580 buidlings in 16 states.

At Simpson Thacher, corporate partner Brian Stadler and real estate head Greg Ressa led the team advising Blackstone. In the past two and a half years Simpson Thacher has advised Blackstone on deals with an aggregate value of $76bn (£30.1bn).

Acquisition financing was led by Goldman Sachs, Bank of America and Bear Stearns, with Cleary Gottlieb Steen & Hamilton advising the banks.