US private equity giant Blackstone has become embroiled in a legal row with one of Italy's biggest media magnates over the sale of the former headquarters of the Corriere della Sera newspaper in Milan, according to a report in the Financial Times.
Blackstone filed a lawsuit in November accusing Urbano Cairo, chairman and chief executive of RCS MediaGroup, of attempting to extort money by laying a false claim to ownership of the building.
The office building was acquired from RCS MediaGroup in 2013 for €120 mln, but Cairo is seeking to have the sale annulled on the basis that it was agreed under duress when his company was on the brink of bankruptcy, the FT reported. He has filed an arbitration case in a Milan court under Italy's usury laws which claims that Blackstone took advantage of his company's situation to undercut the market price.
The five-year dispute is alleged to have held up a proposed sale of the building to German insurer Allianz for a reported sum in the region of €250 mln.
Blackstone has filed a counter suit with a claim for tortious interference and is seeking a declaration that it is the rightful owner of the property on Via Solferino. In its lawsuit, filed before a New York State judge in November, the company describes Cairo's action as 'spurious, malicious and extortionate.'
Cairo, who also owns TV channel La7 and Serie A football club Torino, faces a fine of up to US $100 mln (€88.7 mln) if he loses the case, the FT quoted sources close to the case as saying.
In a 2013 press release Blackstone said it would receive €10.3 mln in annual rent on the property, equating to a gross rental yield of 8.6%, but the five-year average net yield is said to have been closer to 4.1%, according to the FT.
Carlo Alberto Carnevale Maffè, professor of business at Milan’s Bocconi University, told the newspaper that the case hinged partly on whether the Italian courts viewed the headquarters of a national newspaper as a cultural asset.
'It is like buying the Colosseum. If you are naive enough to buy the Colosseum, you cannot complain if you are sent to arbitration,' he said.