The Real Deal New York

Thor ups bid for Empire State Building

September 09, 2013 08:28PM
By Adam Pincus

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Empire-State-BuildingJoeSitt

The Empire State Building, Joe Sitt

UPDATED, Sep. 10, 9:00 a.m.: Three days after Malkin Holdings informed investors that they would continue with a planned initial public offering of the Empire State Building and other properties, Thor Equities increased its bid for the fee interest in the Art Deco tower to $1.4 billion.

The price is above the appraised value of the Empire State Building Associates, the entity that controls the fee ownership of the building, as well as the exchange value of the ESBA; both figures are used to determine the relative value of the building in an IPO.

Thor made the offer this afternoon in a letter sent by attorney Stephen Meister, a partner with the law firm Meister Seelig & Fein, who has represented a group of investors seeking to derail the IPO through the courts.

Thor has made three previous bids for the property: One for an undisclosed amount, but greater than $2.1 billion; another for the ESBA position; and a third for the Empire State Building Company, which operates the building through a sublease. The amounts of the last two bids were not disclosed either but were lower than $1.4 billion.

Sitt’s initial bid above $2.1 billion was for both the property, owned by ESBA; and the sublease, held by ESBC. His most recent bid is just for the property, owned by ESBA.

The latest bid continues a struggle between Malkin Holdings, which owns large stakes in the ESBA and ESBC, and other investors who would rather sell the tower than take it public.

Malkin Holdings through an outside spokesperson, declined to comment. Sitt declined to comment.

Jason Meister, a vice president at the brokerage firm Avison Young, confirmed the bid had been made, but would not confirm the price.

Meister ESB letter_1

Meister ESB letter_2

  • Swedish Spellchecker

    If they are going to become owners of one of NYC’s most iconic landmarks, hopefully they will learn how to spell.

    • Edward Taussig

      If this is not a tax advantaged deal (as the IPO is) then most of this so-called excess over the exchange value is just going to go to Uncle Sam – how is that better? The investors deserve an answer from Thor

  • HughGass

    why is a litigation attorney submitting offers to purchase?

  • VPERS

    The last offer was for 2.1 this is for 1.4…
    Someone help me connect the dots please

    • WolfLarsen

      Sitt’s initial bid above $2.1 billion was for both the property, owned by ESBA; and the sublease, held by ESBC. His most recent bid is just for the property, owned by ESBA.

      Get it?

  • ESBA investor

    This offer is NOT greater than the exchange value in the IPO. I am a private investor in ESBA with no connection to the Malkins. The $1.4 billion FAILS to take into account the mortgage amount that would have to be repaid of approximately $250 million and the 10% or $140 million commission that would be payable to the Malkins. These actually bring the net payable to the investors below the exchange value of the IPO.
    The claims that investors would get an amount far exceeding the exchange value are materially incorrect.

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