After almost a year-long internal battle, more than 80 percent of the Empire State Building's 2800 shareholders have given the Initial Public Offering (IPO) plan a go-ahead, reports The Wall Street Journal.
The building will be listed on the New York Stock Exchange (NYSE), according to a regulatory filing, Wednesday, May 29.
The building will now be rolled into a public Real Estate Investment Fund (REIT) called the Empire State Realty Trust Inc., which will give the REIT participants half the value of the building's appraised $2.53 billion. The other half of the value will go to the investors in Empire State Building Company LLC. The REIT will comprise of 12 properties including the Empire State Building. Of the 12 properties, seven are located in midtown Manhattan while the others are in Westchester County, Connecticut and Fairfield County. The estimated size of the IPO is around $1 billion.
The REIT had faced constant opposition from a small group of investors, which was holding back the venture. The dissident group stated that the REIT would not benefit the shareholders. To compensate the objecting minority, other shareholders and Malkins Holdings LLC, the company that manages the building, had proposed to pay them $100 for every $10,000 initially invested. The objecting minority then called the provision illegal and took the matter to court. The ruling went in favor of the Malkins.
However, despite the opposition, the REIT has now gained approval. The Malkins claim that voting is still open for the next ten days and opposing investors could still change their minds.
"We are pleased to deliver to our investors a proposal which has received such support. We will terminate the solicitation in due course. We urge all investors who have not yet voted in favor of the proposed consolidation and IPO to do so immediately," a spokesperson for The Malkins said in a statement.
But some of the opposing investors still seem to be against the plan and are not giving up as yet. According to the New York Times, they have filed a stay order with the court and are waiting the Judge's decision.
"I don't know that it will be feasible to contemplate the transaction even in the absence of a stay because anyone involved in the transaction would know that if I win, the votes would be no good. I have no idea how you do a $1 billion I.P.O. with that hanging over you," Stephen Meister, attorney representing the protesting group said to the New York Times.
