Warren to net £12.5m from Online Sports deal

Frank Warren is reversing his boxing promotion and management company, Sports Network, into Online Sports and Leisure, a cash shell, in a deal that will net him up to £12.5m.

The AIM-listed company, which will be renamed Sports and Leisure, will initially pay Mr Warren £3m cash for a 22 per cent stake. It has an option to buy a further 28 per cent for £7m in cash and shares, which it expects to exercise later this year.

Mr Warren, who manages more than 50 boxers including 10 world title holders such as Joe Calzaghe, will run Sports and Leisure as a partnership deal while he serves out an existing ban on holding any company directorships imposed in 1996.

Online, which has sat on the £1.5m of cash it raised from its admission to AIM in May 2000, is raising £3.5m through a share placing at 15p to fund the deal. It is making an open offer to shareholders that could raise up to a further £1.4m.

Mr Warren, who is the sole owner of Sports Network, will be eligible to become a company director next February when his period of disqualification is up. He can earn a further £2.5m if Sports and Leisure meets certain profits goals by 2005.

Edward Simons, the chief executive of Sports and Leisure, said: "Mr Warren has very strong relationships with broadcasters such as Sky and he is one of the top three promoters in the world – and the other two are in their seventies. Sports Network has 70 per cent of the UK market and is the natural magnet for young, up and coming boxing talent."