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 thequestion, did Blackstone pay too much? The price skyrocketed pastBlackstone's original $36-billion offer after Vornado's competingoffer fueled a bidding war--only to see Vornado backed out of therace at the 11th hour. According to last week's Feedback Poll, 46%feel Blackstone overpaid for the Chicago-based office REIT. On theother 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 sophisticatedinvestors that were bidding for EOP. They had access to the booksand they are smart. You have to assume they have a pretty goodtaste for the cash flow they're going to be getting for thoseproperties. You have to take that into account when consideringwhether they overpaid or not.