Reckson Realty Gets $4.6 Billion Bid from Icahn

NEW YORK -- Reckson Associates Realty Corp. received a $4.6 billion takeover offer on Thursday from billionaire investor Carl Icahn and Macklowe Properties, topping a bid from SL Green Associates for the office building owner.

The board of Reckson, whose holdings are concentrated in New York City and its suburbs, will review the new offer, which amounts to $49 per share, a Reckson spokeswoman said.

Reckson also has $2 billion of debt that would be assumed by a buyer.

The new bid comes less than a week before shareholders are scheduled to vote on a $4.13 billion cash-and-stock offer from SL Green Realty Corp. The vote is scheduled for Nov. 22 but could be delayed by the Icahn/Macklowe bid.

Shares of Reckson were up $2.78, or 6 percent, to $47.84 in midday trade on the New York Stock Exchange.

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Bank of America analyst Ross Nussbaum said a heated bidding war was unlikely.

"SL Green has previously been a disciplined buyer," he wrote in a research note. "Putting a higher number on the table would impact management credibility, in our view."

SL Green's offer was $1 to $2 per share below what Reckson could be expected to fetch, Nussbaum said.

Topping the Icahn/Macklowe offer of $49 a share would mean diluting SL Green's funds from operations, a measure of the performance of real estate investment trusts, by as much as 20 cents per share in 2007, Nussbaum said.

The SL Green deal calls for a group led by Reckson Chief Executive Officer Scott Rechler to buy most of the company's suburban office holdings for $2.1 billion after the deal closes.

A group of Reckson shareholders lead by Arnhold and S. Bleichroeder Advisers LLC opposes the SL Green deal, saying it undervalues the suburban properties. Arnhold controls about 1 percent of Reckson.

Prior to the Icahn/Macklowe offer, shareholder advisory services -- including Institutional Shareholder Services; Glass, Lewis & Co., and Proxy Governance Inc. - came out in favor of the SL Green deal.

Representatives from SL Green, Icahn and Macklowe could not be reached for comment.

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