The Malkins already said earlier this month that they would proceed with the plan to go public after reviewing other proposals and determining that an IPO is in investors’ best interest. In addition to the unsolicited offer for the tower from Sitt, the Malkins received one from investor Rubin Schron and a joint bid by Philip Pilevsky and Joseph Tabak.

Pilevsky, whose group also included unnamed Middle Eastern investors, said he is no longer pursuing his bid after being rebuffed by the Malkins. He said his group was willing to raise its offer of $2.1 billion, which included the value attributed to a sublease to a company majority-owned by the estate of Leona Helmsley.

“They seem to want to do their IPO, and they don’t care what the bid is,” he said in an interview Sept. 18. “We dropped the effort. If they would do it, we’d do it in a minute.”

Lazard Review

Hugh Burns, a spokesman for the Malkins with Sard Verbinnen & Co., declined to comment. The family said in its filing that it reviews “all matters,” including unsolicited proposals, and that Lazard Ltd. acted as an independent adviser in determining to pursue the IPO.

The “Sturm und Drang” between dissidents and the Malkins may concern investors, as may litigation, said Green Street’s Knott. A small group of unitholders has appealed an April 30 ruling upholding a provision that would pay unitholders a nominal $100 a share if they refused to back the REIT after 80 percent voted for it, which they called coercive.

A reversal “could have a material adverse effect on us, which could take the form of monetary damages or other equitable relief,” the company said in its prospectus.

REIT Shares

At the top end of the range, the IPO would be the biggest for a U.S. REIT after Douglas Emmett Inc. raised almost $1.6 billion in 2006, according to data compiled by Bloomberg. It comes after a drop in real estate shares in recent months amid speculation that rising interest rates may curb property demand. The 138-member Bloomberg REIT Index lost more than 11 percent through yesterday since peaking in May.

Anthony Malkin, who is to become the REIT’s chairman, chief executive officer and president, is expected to own Class A common shares with a value of $413.7 million based on the midpoint of the projected price range, according to the prospectus. Peter Malkin, to be chairman emeritus, would have shares valued at $84.1 million.