Robert Lloyd used stolen photographs of the leading industrialist and his mistress to frighten him into handing over the cash, an Old Bailey court was told.
Lloyd, 38, of Walworth, south-east London, pleaded guilty to blackmail between March 1988 and April 1989.
The judge, Mr Recorder Michael Stuart-Moore, described the blackmail plot as 'extortion of the ugliest kind'.
He told Lloyd: 'You acquired knowledge of a rich and powerful businessman whose guilty secret you were determined to exploit in order to make a large financial gain for yourself.'
The court was told that the photographs were stolen from the woman's home during a robbery in 1988.
John Bevan, for the prosecution, said that Lloyd, who was acquainted with the mistress, discovered that the 53-year-old businessman was keeping his love affair secret from his wife and decided to take advantage of that fact.
Through greed or envy, or a mixture of both, Lloyd then threatened to use the pictures to expose the businessman's affair, Mr Bevan said.