Allen & Overy (A&O) will advise Philip Green in his bid for Arcadia despite its current instruction from potential co-bidder Baugur. Corporate partner Alan Paul is leading the team advising Baugur and fellow corporate partner David Wootton will head a team joining Dechert as co-counsel to Green. A&O's decision to advise both clients comes as a surprise, given that Green is trying to distance himself from Baugur following a police raid, in connection with alleged fraud, on the Icelandic retailer's headquarters in Reykjavik the week before last. A&O's agreement to represent both sides is being seen as highly unusual in the City. "Given that there could be a series of issues, we'd view it as dangerous. Obviously, both clients have given their consent, and with the current shortage of work it must be very tempting," said one source . Green's original plan was to launch a joint bid with Baugur, which would see the business divided up afterwards. But following the fraud allegations he decided to make the bid alone and then sell on parts of the business to Baugur. However, both options had potential difficulties. In the first scenario, it would be unclear who should control the offer, while in the second the takeover panel would be expected to ask Arcadia's advisers to approve the share price. Given that Baugur has a 20 per cent stake in Arcadia, the panel will want to be certain that the share price is fair. "Add to these potential difficulties the investigation for fraud and Green's approach, and I'd say it's not a good idea," added the source. Previous instructions from Green have also proved to be controversial. In 2000, A&O advised Green, alongside Dechert and Linklaters, on his bid for Marks & Spencer (M&S). Controversy arose when it transpired that Green's wife had bought shares in M&S just before the bid was announced. But when the takeover panel asked for confirmation that she had not breached the takeover code, Green pulled the bid. Although A&O declined to comment, a spokesman said: "We can confirm that Allen & Overy has acted for, and continues to act for, Baugur in relation to its shareholding in Arcadia. Dechert is advising Philip Green in his discussions with Baugur. When there is an offer for Arcadia, a separate team will be advising the bidding vehicle, in conjunction with Dechert." Halifax Bank of Scotland has given Green a guarantee that it will provide further funding for his financing. Green will also draw on family funds to finance the takeover. Arcadia is being advised by a team at Clifford Chance, led by corporate partner David Pudge.