CHICAGO (AFP) - US investment fund Blackstone Group is to buy leading US real estate firm Equity Office Properties Trust for about 36 billion dollars.

ADVERTISEMENT

Blackstone is to acquire all of Equity Office's outstanding common stock for 48.50 dollars per share in cash in a record acquisition by an investment fund, a joint statement said Monday.

This represents an 8.5-percent premium over the closing share price on Friday, and a 20.5-percent premium over the three-month average price of EOPT stock.

The total sum includes debt of 16 billion dollars, a joint statement said. EOPT owns and manages office buildings.

The previous record dated from July 24, when Bain Capital, Kohlberg Kravis Roberts (KKR) and the Merrill Lynch bank bought Hospital Corporation of America for 33 billion dollars, including 11.7 billion in debt.

The deal "represents the largest private equity deal in history", the statement quoted Blackstone senior managing director Jonathan Gray as saying.

The Equity Office board has unanimously approved the transaction but it must also be approved by shareholders at a special meeting for which a date has not yet been set.

Acquisition financing will be led by Goldman, Sachs and Co., Bank of America, and Bear Stearns, the leading US investment houses. Once the deal has been completed, which is expected in the first quarter of 2007, Equity Office will be merged into a Blackstone affiliate.

"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 statement quoted Equity Office president and chief executive Richard Kincaid as saying.

Jonathan Gray, Blackstone senior managing director, added: "We are extremely excited about this landmark transaction with Equity Office, which represents the largest private equity deal in history."

Equity Office, which operates through its various subsidiaries and affiliates, is the biggest US publicly held (stock-market quoted) company owning and managing office buildings. It controls 580 buildings in 16 states and in the US capital, Washington.

The company has a market capitalization of about 15.7 billion dollars and annual sales of 3.4 billion.

The Blackstone Group, a private investment firm founded in 1985 and holding 67 billion dollars in investments, has almost 13 billion dollars invested in real estate.

The private equity sector, which has thrived in recent years, consists for the most part of investment funds or banks buying stakes in either non-listed companies which are generally broken up and sold at a profit, or buying listed companies which are then withdrawn from the stock market.

This deal is the latest of many by US investment funds in recent months.

According to the consulting group Dealogic, the total amount of transactions of this kind has reached 320 billion dollars in the United States so far this year and 563 billion worldwide, an increase of 60 percent from the 2005 total of 350 billion.