Blackstone sues RCS owner over sale of headquarters in Milan
Milan — US private equity firm Blackstone Group has launched legal action against the chair and controlling shareholder of Italian publisher RCS MediaGroup over a disputed property sale, a copy of the lawsuit shows.
Filed in New York on April 22 and suing RCS chair Urbano Cairo directly, the latest action adds to the one Blackstone filed against RCS last November. The first lawsuit was put on hold on April 24 pending the outcome of arbitration in Italy.
Asked about the lawsuit against him on the sidelines of RCS’s AGM on Thursday, Cairo said he could not comment as he had no direct information on the matter.
The case centres on RCS’s historic headquarters in central Milan, which Blackstone bought from RCS for €120m in 2013. Cairo has said Blackstone bought the properties at too low a price when RCS faced financial difficulties, and the transaction should be declared void.
The publisher, owner of influential daily Corriere della Sera, launched arbitration proceedings under Italian law in November to annul the sale.
Blackstone has, in turn, accused RCS of falsely claiming that it still owns the property and said the publisher improperly blocked it from selling it to Germany’s Allianz last summer, according to the two US filings.
“The decision to proceed with an arbitration was taken by the board,” Cairo said. “It was something that could not be helped after the due diligence analysis.”
The private equity firm says that in the latest complaint that it suffered damages as a result of Cairo’s alleged “intentional interference with [Blackstone’s] prospective business relations in an amount to be proven at trial”.
Cairo said RCS had told Blackstone that the valuation of the assets was too low long before news of the sale to Allianz emerged. “We informed Blackstone in writing in March last year,” he said on Thursday.
The RCS board has decided against setting aside funds to cover legal risks related to the dispute, a financial document published on Thursday showed.
Cairo, who started off by selling advertising for the media group of former prime minister Silvio Berlusconi and went on to build his own media empire, took control of RCS in 2016 after a hostile takeover that pitted him against Italy’s business elite.
Famous for his cost-cutting abilities, Cairo has been able to turn RCS around without job losses.