A&O on both sides of Cheese Company buy

Allen & Overy (A&O) has shadowed investment banking client Rabobank to advise on both sides of an acquisition.

Through Rabobank, the firm acted for both vendor and purchaser on the acquisition by the Cheese Company – a joint venture between Milk Link, holding 75 per cent, and Glanbia, holding 25 per cent – of a series of cheese production factories and a packing plant from Glanbia.

The A&O finance team, led by partner Tony Keal, acted for Rabobank as the lender on all aspects of the financing, including the senior debt and the stock financing.

Rabobank was also acting as corporate financial adviser to the vendor. A&O subsequently advised Glanbia, through Rabobank, on a discreet issue surrounding London Stock Exchange listing rules. The firm has played down the extent of this corporate role, which lasted around a week in the life of a deal that began in September last year.

A Rabobank spokesman said: “A&O would have installed its own Chinese walls, of course. Before we mandated the firm, we always ensure our clients and our compliance people are happy.”

Keal said: “The clients approved the instruction. There’s no issue of conflict of interest [and] there’s no issue regarding Chinese walls.”
It is not uncommon for investment banks to act as lenders and financial advisers to parties on opposite sides. A Rabobank spokesman said: “In a leveraged transaction, it’s common for the seller bank providing financial advice to offer an introduction to its debt team.”

Separate Rabobank corporate and finance teams advised through strict Chinese walls. Crucially, Rabobank’s corporate department is physically sealed off from the rest of the investment bank.

Burges Salmon advised its longstanding client Milk Link, the largest milk producer in the South West, which was introduced to the firm through agriculture partner William Neville three years ago.

Burges Salmon partner Alan Barr, who led the team on the deal, said it formed part of Milk Link’s strategy to ameliorate fluctuations in the price of milk by acquiring its own cheese production and packing facilities.

Burges Salmon fielded a team of some 15 lawyers on the deal, which stayed in London for the two weeks before completion. “It made us realise that we don’t need to put lawyers in our London office full time,” said Barr.

Pinsents, meanwhile, led by Birmingham partner Paul Harkin, advised its own long-term client Glanbia, while Arthur Cox advised Glanbia on the Irish Stock Exchange and competition issues.