Commerzbank snubs Duffield's Jupiter offer

John Duffield, the colourful fund manager in charge of New Star Asset Management, has made an offer for his former company, Jupiter, which he left two years ago after a bitter spat with its new owners.

The surprise move comes after Mr Duffield repeatedly denied he wanted to take back Jupiter, saying that Commerzbank, the German bank which now owns it and which he described as Nazis, saw him as the devil.

His prediction has turned out to be at least partly correct. Commerzbank's advisers, Goldman Sachs, took less than 24 hours to reject Mr Duffield's tentative bid.

Mr Duffield last week wrote to Commerzbank, which first took a stake in Jupiter in 1995, registering his interest in Jupiter. He said in the letter that he had financial backing from HSBC and would be prepared to pay "not less than £50m more than the highest credible offer".

Mr Duffield is understood to have became so keen to re-take control of Jupiter, the business he founded in 1985, that he was willing to pay in cash and to stretch to £100m more than other offers.

Goldman Sachs is talking to other interested parties but so far the talks have not led to a concrete offer. Commerzbank would not say whether it rejected Mr Duffield's offer because the terms of the offer were unsatisfactory or because they were simply not prepared to sell to the person who likened them to Nazis and sued them in 2000 for wrongful dismissal.

Mr Duffield is understood to have made the offer despite knowing it was unlikely to succeed because the price tag attached to Jupiter has fallen dramatically in the past few months.

The business was put on the market in April, when the City gave it an approximate valuation of £600m to £700m. Commerzbank wants to achieve at least £500m, but may now have to accept as little as £300m because markets have continued to fall, decimating the balance sheets and valuations of the asset management sector.

One reason Commerzbank may balk at selling to Mr Duffield rather than others is that it paid £800m for Jupiter, in a deal that netted a personal fortune of £175m for Mr Duffield. Having worked for his new German bosses for five years, Mr Duffield sued them in 2000 for wrongful dismissal, over a dispute about how much Commerzbank would pay for the remaining 25 per cent of the business. He settled the case out of court and collected £5m in compensation.

Mr Duffield further outraged Commerzbank by poaching five of his former colleagues to come to New Star. This forced the bank to offer a bonus package which cost £24m to Jupiter staff to encourage them to stay on.

The two sides are also locked in a legal dispute about who should control an investment trust that contains assets belonging to both New Star and Jupiter staff.