After more than a year of intense behind-the-scenes battles, stakeholders that own the Empire State Building approved a plan this week to sell the 102-story tower as part of an initial public offering.
The plan’s approval is a major victory for Peter L. Malkin and his son Anthony E. Malkin, the real estate barons who control the landmark tower but are minority owners. They have vigorously campaigned in recent months to persuade 80 percent of the building’s roughly 3,000 stakeholders to vote in favor of going public, even as a small group of stakeholders fought against the plan.
The threshold was finally crossed Tuesday, according to a filing made with the Securities and Exchange Commission on Wednesday. That vote now clears the way for the Malkins to offer to the public shares in Empire State Realty Trust â€" a company that will combine 19 properties in the New York area with the crown jewel, the Empire State Building. The public offering is expected to raise as much as $1 billion, and the Malkins’ stake could be valued as much as $730 million.
The vote was delayed for months by a small group of dissidents led by a California businessman, Richard Edelman, and Andrew S. Penson, a speculative investor. They had contended that the deal could hurt the value of investors’ shares, potentially exposing them to tax liabilities and the wild swings in the stock market, all while enriching the Malkins.
The tide began to turn this month when a New York State judge ruled in favor of the Malkins in a legal challenge mounted by some members of the dissidents’ group. The group was fighting a provision that requires holdouts to either sell their units back for $100 a unit, or vote in favor of the plan after the 80 percent threshold is reached. The plans for the public offering values those units at about $323,000 each.
A spokesman for Malkin Holdings said in an e-mailed statement that the company was pleased with the vote tally.
“The vote remains open and we urge all investors who have not yet voted in favor of the proposed consolidation and I.P.O. to do so immediately,†the statement said. “We look forward to delivering to our investors what we believe to be the many benefits of this transaction.â€
But some of the dissidents vowed to continue to fight the plan.
“People are going away for a month or two months, and they don’t want to worry about getting a 10-day notice that says they have to change their vote or they could lose their investment for $100,†Mr. Edelman said. “That’s a pretty coercive way to get people to vote in your favor.â€
Mr. Edelman said that a motion to stay the judge’s decision as well as an appeal have been filed in the New York case and that those outcomes would affect whether the public offering goes forward. A lawyer representing some of the dissidents did not return a request for comment.
While even supporters of the deal said the Malkins would become wealthy as a result of the offering, many said they wanted the ability afforded by a publicly traded company to ell their stakes easily.
The fight is part of a longstanding feud dating back to 1961, when Harry B. Helmsley, a prominent figure in New York real estate, and his partner, Lawrence A. Wien, bought control of the Empire State Building from the industrialist Henry Crown. Peter Malkin, who was also involved in that deal, is the son-in-law of Mr. Wien; Anthony Malkin is Mr. Wien’s grandson.
To help finance the deal, the group sold 3,300 units in the building priced at $10,000 a unit. Mr. Edelman said the group of dissidents would hold their regularly scheduled conference call on Thursday night.
“I’m sure it will be a lively one,†he said.
