Finance and travel price comparison Web site Moneysupermarket.com has paid a competitor almost 4 million pounds to settle a dispute over intellectual property, sources familiar with the situation told Reuters.
Moneysupermarket, which is poised to float on the London Stock Exchange at an overall expected value of 1 billion pounds, paid rival price comparison service Moneyfacts.co.uk 3.9 million pounds ($8 million) in compensation in 2004.
The payment came after Moneyfacts found Moneysupermarket had used its data without permission for around 18 months after the latter company migrated to the Internet in 1999, according to the sources.
News of the out-of-court settlement comes as retail investors apply to buy shares in the Moneysupermarket flotation, Britain's biggest technology listing for almost seven years. The share offer closes on Tuesday.
Financial accounts for the two companies - filed with Companies House, the official government register of British companies, and obtained by Reuters - verify the payment.
Moneyfacts' annual report and its accounts for the year to end-July 2005 show an exceptional item of 3.9 million pounds in 2004, which "relates to the full and final settlement of a claim in respect of database and intellectual property rights".
Moneysupermarket's accounts for the year to end-December 2003 include exceptional costs of 4.2 million pounds, which "relate to the full and final settlement, after the year-end, of a claim in respect of database and intellectual property rights". The discrepancy in the two numbers may be due to legal fees or other associated costs.
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A spokeswoman for Moneysupermarket said its executives were not available for comment. A spokesman for Moneyfacts declined to comment. It is understood that Moneyfacts is prevented from discussing the situation due to a confidentiality clause written into the compensation agreement.
Moneysupermarket receives revenue from banks, airlines and other providers when its price comparison tables direct a user to a provider's site for them to buy a product or make a booking. It also gets advertising income.
Moneyfacts also helps consumers compare financial products but does not earn commission from product providers from "click-throughs". Instead, it operates a business-to-business model, selling its real-time data to product providers and financial advisers.
Moneysupermarket has said it aims to raise 180 million pounds to pay down debt and fund its growth. Earlier this month, it set an indicative price range of 170 to 210 pence for its initial public offering, which at the midpoint would be worth around 388 million pounds and represent around 41 percent of its share capital.
Simon Nixon, who founded Moneysupermarket 14 years ago, owns a majority stake of over 80 percent after buying out his estranged co-founder Duncan Cameron in June. He is expected to sell 60.3 million shares in the flotation. Nixon has also granted Credit Suisse an over-allotment option which may result in the sale of up to 30.6 million additional shares.
Senior managers and current and former employees are selling a further 26.5 million shares, but Nixon and his top staff will still control the group after the flotation. Dealing in Moneysupermarket's shares is expected to start on or around July 31.