A&O risks fresh conflicts storm on Boots bonanza

Allen & Overy (A&O) is in another conflicts row after taking instructions from two clients on the Boots-Alliance UniChem merger and the related sale of Boots Healthcare International (BHI).

A&O, which is advising UniChem on its £7bn merger with Boots, also advised GlaxoSmithKline (GSK) on its failed bid for BHI. Boots agreed to sell its healthcare division to Reckitt Benckiser last week for £1.9bn in cash.

The Boots-UniChem merger is preconditional on the BHI sale. Boots plans to return most of the proceeds of the sale to its shareholders as part of the UniChem tie-up.

There is no direct conflict, as A&O has roles on two separate transactions, but as a partner at another City firm said: “If GSK had won the BHI auction, but later decided to terminate the purchase, how would A&O advise GSK knowing that the company’s decision would be adverse to its other clients’ interests?”
Freshfields Bruckhaus Deringer corporate partner Mark Rawlinson is advising Reckitt on the BHI purchase. It is the first M&A deal Freshfields has handled for Reckitt.

The beauty parade was necessary as Reckitt’s regular adviser Slaughters was acting for Boots. Remarkably, four Slaughters clients – Boots, GSK, Reckitt and UniChem – are involved in the deal (see column, page 13).

An A&O spokesperson said: “We have no conflict, legal or commercial.”