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Blackstone risks paying damages in dispute with Italy’s RCS

FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid

MILAN (Reuters) – Milan’s Arbitral Tribunal has judged that the contracts over the sale of Italy’s RCS (RCSM.MI) headquarters to Blackstone (BX.N) in 2013 were valid but found that the purchaser’s behaviour may entitle the Italian publisher to compensatory damages, RCS said on Tuesday.

The case centres on the ownership of RCS’ historic headquarters in central Milan, which Blackstone bought from RCS for 120 million euros ($131.71 million) in 2013.

RCS, owner of influential daily Corriere della Sera, launched arbitration proceedings in Milan in late 2018 to nullify the sale of the asset, saying Blackstone took control of the headquarters at too low a price, while RCS faced financial difficulties. It asked for the transaction to be annulled.

Blackstone has in turn accused RCS of falsely claiming that it still owns the property, and of improperly blocking it from selling the property to Germany’s Allianz SE (ALVG.DE).

The U.S. fund consequently filed two lawsuits in New York, one against RCS and the other one directly against RCS’s chairman and controlling shareholder Urbano Cairo. They were put on hold last year pending the outcome of the arbitration in Italy.

The Arbitral Tribunal ordered two expert witnesses to report separately on the condition of RCS in 2013 and on the market value of the property, the Italian company said on Tuesday.

This is a partial and non-definitive decision and the arbitration proceeding continues, RCS added in its statement.

Reporting by Claudia Cristoferi, editing by Gavin Jones

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