Slaughter and May may be advising high-profile entrepreneur Hugh Osmond on his bid for Six Continents (6C), but it remains to be seen which UK firm will secure an instruction from KKR.
At the time of writing, KKR had still not declared its hand, but insiders say that the private equity house has been keeping an eye on 6C, formerly the Bass Group, since its demerger was announced in 2002. On 24 February the US private equity giant backed out of its planned bid for Safeway, possibly to concentrate its efforts on 6C.
Herbert Smith corporate partner Anthony Macaulay advised KKR on the Safeway battle, narrowly beating Lovells to the job. However, neither Lovells nor Herbert Smith, the two favourites for the role, have yet been instructed on 6C.
KKR has an extremely close relationship with its US law firm Simpson Thacher & Bartlett; in fact, KKR is virtually the raison d' être for Simpson Thacher's London office.
The firm has been steadily building up its London presence, poaching finance partner Euan Gorrie from Allen & Overy and importing competition partner David Vann from the US. Although Vann is not UK qualified, he worked alongside Herbert Smith on the Safeway bid.
However, while Simpson Thacher will undoubtedly try to keep some future UK work for itself, the firm does not have the corporate capacity to take on a public bid.
Much of the magic circle is already conflicted on 6C. Aside from Slaughters, Linklaters and A&O are both acting on the 6C demerger. The group is being split into Mitchells & Butler, comprising its pub interests, and InterContinental Hotels.
Linklaters will continue as deal counsel on any 6C defence and A&O will provide separate impartial advice to the pub group, with which it has a historic relationship. Both firms have institutional relationships that would make it impossible for them to act for KKR.
Clifford Chance advised 6C's financial adviser SSSB on the demerger, but now the listing particulars have been made public. A source said the firm could conceivably take on a new instruction for KKR or another interested party.
Another potential bidder, at least for the hotels side of the 6C portfolio, is the Hilton Group. The hotel chain is usually advised by Slaughters. The fact that the firm is acting for Hugh Osmond rather than Hilton speaks volumes about Slaughters' commitment to winning back the entrepreneur from Clifford Chance. The hotel chain will have to find another adviser should it bid.
Osmond has claimed that demerging 6C is a financial mistake, although he himself split up Punch, also formerly part of Bass Brewers, when he got his hands on it. Most commentators claim that what he really wants are the pubs. One possible outcome is that, faced with a hostile bid, 6C will auction off the lot – although that will still give Osmond a shot at the pubs.