Numis and client set for clash over Centaur auction

By Abigail Townsend
Sunday 25 January 2004 01:00

A row is set to erupt between Numis Securities and Incisive Media after the broker trumped its client in the auction for business-to-business publisher Centaur.

Numis is in exclusive talks with Centaur, owner of The Lawyer and Marketing Week, and is understood to be offering around £140m for the company. The deal will be financed by taking Centaur on to the Alternative Investment Market (AIM) in an accelerated initial public offering (IPO).

Numis won after an auction process involving various interested parties, including investment firm HG Capital, Emap, United Business Media and Incisive. But concerns have been raised over whether Numis should have been ruled out of joining the auction because of a potential conflict of interest. The firm was appointed co-broker by Incisive in March 2002 and it is understood the publisher still believes Numis to be its broker.

A source close to Numis played down the relationship: "Numis has never advised Incisive on anything. It tried to become Incisive's corporate adviser and that failed. So, that being the case, it thought: 'Why not look at Centaur?' "

But a question mark rem- ains over the involvement of Jag Mundi, who heads Numis's advisory business. Formerly co-head of corporate finance at Investec, he has advised Incisive for a number of years, from its creation in July 2000 when City Financial Communications and Timothy Benn Publishing merged.

The renamed Incisive floated shortly afterwards and Mr Mundi advised the company on the IPO, as well as last year's £35.2m acquisition of Risk Waters, a rival publisher. He is also understood to have advised Incisive on an ultimately unsuccessful bid for Pearson's FT Business and an earlier failed attempt to secure Centaur. Mr Mundi quit Investec for Numis last year.

An investment expert, who preferred not to be named, said if Numis knew Incisive was interested in Centaur when it decided to bid, "it is definitely in a conflict situation. I'm very surprised that Numis have done that. It seems too close to the bone."

He said Incisive, which owns Post Magazine and FX Week, could take the matter to the London Stock Exchange and Financial Services Authority and, if it can prove it lost out on acquiring Centaur solely to Numis, could have a case for damages, which would be heard in court.

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