Italy’s RCS reaches settlement with Blackstone over property dispute
RCS MediaGroup (RCSM.MI) and Blackstone (BX.N) said on Friday they had reached an agreement to settle their legal row over the disputed sale of the Italian publishing company’s headquarters to the U.S. fund in 2013.
Under the settlement, both sides will renounce all legal action and RCS will pay 10 million euros ($10.06 million) to Blackstone, to contribute to the legal fees faced by the fund, the two companies said in a joint statement.
RCS, publisher of Italian daily Corriere della Sera, will also buy back a portion of the office building in Milan – about a third of the whole asset and which was the former headquarters of the newspaper – for 59.9 million euros, twice the amount at which it had sold the space in 2013.
RCS shares surged on news that a settlement had been reached and were up 17% at 1232 GMT.
RCS had launched arbitration proceedings in 2018 to try to nullify the 2013 sale of its historic headquarters in Milan to Blackstone, saying the price had been too low at a time when RCS faced financial difficulties.
The arbitration tribunal ruled in favour of the investment fund and RCS lost an appeal against that ruling in a Milan court.
In Friday’s statement, RCS acknowledged “there was no misconduct or bad faith in relation to the 2013 transaction” and apologised for any wrongdoing, regretting any inconvenience caused to the U.S. fund.
In a lawsuit filed in New York against RCS and its chairman Urbano Cairo, Blackstone had demanded up to $600 million in damages, claiming RCS improperly claimed ownership of the properties and “intentionally interfered” with the subsequent sale of the assets to Allianz, a deal which later fell through.
The U.S. lawsuit had been suspended until the Italian court proceedings were concluded.
“RCS has now publicly acknowledged the decisions (by arbitrators and courts), provided financial compensation and apologised. We consider the matter now closed,” a spokesperson from Blackstone said.
($1 = 0.9937 euros)