The fifth round of bidding over Town & Country Trust has again raised the stakes in the heated battle to buy the Baltimore owner of apartment complexes.
Town & Country Trust announced late Monday that Oriole Partnership LLC had raised its bid to $40.15 a share, trumping an offer of $39.60 submitted shortly before by rival suitor Magazine Acquisition.
The latest round was a continuation of last week's action when both sides submitted bids that topped each other by 50 cents a share.
But this time Magazine offered just a dime more than its rival's standing bid, indicating that the battle may be nearing an end.
On Wall Street, shares of Town & Country dropped 3 cents to close at $41.02 - in contrast to gains of as much as $1 caused by previous bids.
"It does feel as though we're reaching the limit, if the market's reaction has any say-so," said Richard Anderson, a senior real estate analyst at Harris Nest in New York. "If we haven't, we're very close."
Town & Country stock is up 38 percent since Magazine, a joint venture of Morgan Stanley Real Estate, One Real Estate and Sawyer Realty Holdings, first announced an agreement to buy Town & Country in December for $33.90 a share.
Weeks later, Oriole, a joint venture of Essex Property Trust Inc., UBS Wealth Management-North American Property Fund Ltd. and AEW Oriole Co-Investment LLC, entered the fray, offering $36 a share, a bid it subsequently increased to $38.50.
In its statement late Monday, Town & Country said its board of trustees determined that Oriole's latest bid is a "superior transaction," triggering a three-business-day period for Magazine to match it or walk away and collect a $20 million break-up fee.
The new deadline is 11:59 tomorrow.
"We're currently reviewing our options," Lesley Bogdanow, a spokeswoman for Morgan Stanley, said yesterday.
Harvey Schulweis, Town & Country's chairman and chief executive, did not return calls seeking comment.
Mary C. Jensen, the spokeswoman for Essex, a Palo Alto, Calif.-based owner and manager of West Coast apartment complexes, could not be reached.
"Essex has really shown a willingness to fight back here and quickly," Anderson said. "Essex is trying to present itself as willing to go the distance."
A third potential buyer, Berkshire Property Advisors LLC, a private Boston company that made a tentative bid of $37 per share in early February, hasn't acted since then.
The keen interest in Town & Country's apartments reflects investors' voracious appetite for owning multifamily properties and the strong demand for entry-level housing, Anderson said.
Even so, the proposals for the real estate investment trust seem to have reached their upper limits, he said.
"It's gotten pricey here ... when you factor in the cost required to maintain the facilities ... just to maintain the level of quality and performance of the properties."
Town & Country owns 39 apartment complexes with 13,300 units in the Mid-Atlantic, including 18 in the Baltimore area.
The real estate investment trust's board is continuing to recommend its shareholders approve the deal with Magazine at a special meeting March 9.
Dec. 19 -- $33.90-a-share merger deal with Magazine Acquisition, a joint venture of Morgan Stanley Real Estate and Onex Real Estate, was announced.
Jan. 29 -- $36-a-share offer proposed by Oriole Partnership LLC, a joint venture of Essex Property Trust, AEW Capital Management and UBS Wealth Management.
Feb. 2 -- $37-a-share offer proposed by Berkshire Property Advisors LLC.
Feb. 6 -- Oriole ups bid to $38.50.
Feb. 8 -- Magazine raises bid to $39 a share. Oriole bids $39.50.
Feb. 14 -- Magazine bids $39.60. Oriole offers $40.15