SWITZERLAND - The credit squeeze claimed one of its first major deals last week when a consortium led by London-listed Israeli property firm Delek announced it had pulled out of the planned CHF 3.5bn (€2.8bn) acquisition of property firm Jelmoli's 88-property Swiss portfolio.

The deal, which had it gone ahead would have been one of the largest recent European transactions, collapsed after Jelmoli refused to compromise on an asking price.

Delek chief operating officer Nadav Zohar said the consortium had been unable to persuade Jelmoli to re-price, taking into account market uncertainty and the rising cost of credit, which had "not been adequately reflected" in the original price.

 "The market has changed significantly and the deal as it stood couldn't deliver our return requirement. Credit is more expensive," said Zohar.

Just weeks ago, Zohar had told IPE Real Estate he was optimistic a new price could be agreed but last week said a renewal of talks was unlikely.

"It's pretty much off. We tried to bridge the gap and we worked relentlessly on a formula, but the gap can't be bridged," he said.

"Could we go back? I don't think they'll change their minds but, if they do, we're happy to go back to the negotiating table. We had the facility in place for the deal. I don't know whether credit would be difficult to get if we go back to the table. It would depend on the bank's appetite," he continued.
The consortium comprised as equal partners Delek, its parent company Delek Belron Intl and the Igal Ahouvi Group.

In a statement, Jelmoli alleged breach of the original contract, which did not mention the buyer's right to renegotiate the purchase price.