Boxing deal on despite legal row

SPORTS & Leisure Group is to take up an option to buy a stake in Frank Warren's boxing promotion business.

The move had been in doubt after Sports & Leisure was caught in a bitter legal row surrounding broker Collins Stewart.

Sports & Leisure, floated by Collins Stewart last year, owns 22% of Warren's boxing promotion business, Sports Network.

Under an option agreed with Warren, it can buy a further 28% for £7m - but it must exercise its option in the next two days.

There had been concerns that Sports & Leisure might struggle to raise the cash to take up the option after former analyst James Middleweek directly criticised the deal in a report being scrutinised by the Financial Services Authority, the City regulator.

Sports & Leisure is named in Middleweek's court documents, filed as part of his claim against Collins Stewart for unfair dismissal. Middleweek also said he was removed from being the analyst on finance group Numerica, a Collins Stewart client, because he was reluctant to overstate the value of the company. Last week, Numerica's profits warning sent its shares plunging by 47% to close at 38 1/2p.

The FSA is thought to be widening its inquiry into the sale of 25,000 Collins Stewart shares just hours after Financial Mail contacted Middleweek about his legal action. The shares were sold by Merlin, a hedge fund managed by Jeremy Benjamin, a close associate of Middleweek.