Blackstone claims to be caught in “brazen attempted shakedown” over Italian office complex
The firm allegedly broke an Italian law that prohibits a property buyer from taking advantage of a distressed seller
Blackstone Group is fighting an Italian media mogul in court over ownership of an office complex in Milan.
RCS Media Group SpA sold the three-building office complex, its former headquarters, to Blackstone for 120 million euros ($163 million) in 2013 and now the media company is contesting the sale, the Wall Street Journal reports. The litigation has stopped Blackstone’s planned sale of the Milan office complex to Allianz Real Estate GmbH for 250 million euros.
Urbano Cairo, chairman of RCS and an aide to former prime minister Silvio Berlusconi, wants a court to nullify the sale because Blackstone paid a low price and RCS was a distressed seller. Under Italian law, taking advantage of a seller in distress is illegal. The board of directors of RCS and its advisers approved the sale of the Milan office complex after a lengthy review, according to court filings by Blackstone.
According to a press release RCS issued when it sold the Milan office property to Blackstone in 2013, the Italian media company had contacted more than 30 investors to solicit their interest in the property in a process that lasted more than a year.
In a statement, Blackstone said the “RCS’s false and malicious claim” that the 2013 transaction is invalid “is a brazen attempted shakedown.”
Allianz has indicated that it will not buy the office property unless RCS withdraws its claim or the litigation is settled.
Italy has one of the 10 largest economies in the world but ranks 51st in the “ease of doing business index” published by the World Bank, one of the worst ratings among Western European nations. Since 2011 when Blackstone made its first property investment in Italy, the firm has acquired Italian commercial real estate valued at approximately $4.5 billion. [WSJ] – Mike Seemuth