Jelmoli has begun legal proceedings against the Israeli-led consortium that pulled out of the EUR 2 bn deal to buy a portfolio of 88 properties from the Swiss department store group. AIM-listed Delek Global Real Estate (DGRE) confirmed on Wednesday that it received notification on 31 December of the commencement of arbitration proceedings.
Jelmoli has begun legal proceedings against the Israeli-led consortium that pulled out of the EUR 2 bn deal to buy a portfolio of 88 properties from the Swiss department store group. AIM-listed Delek Global Real Estate (DGRE) confirmed on Wednesday that it received notification on 31 December of the commencement of arbitration proceedings.
Jelmoli is taking the action against Empario Holding, the company established by the consortium to complete the deal. The individual consortium members named in the action are DGRE, which holds a 33% stake in Empario; DGRE's parent company Delek Belron International and Igal Ahouvi's Blenheim Properties Group. The Swiss retailer is pushing for the enforcement of the sale agreement, or failing that compensation.
The transaction was first announced on 31 July last year, shortly before the subprime mortgage crisis in the US began to affect the global financial markets. The consortium subsequently tried to get Jelmoli to accept a price cut as the credit markets dried up. When this failed, Delek Global Real Estate and its partners pulled out of the deal.
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