A&O replies to Co-op's query on Galileo's bid

Allen & Overy senior partner Bill Tudor John has written to the Co-op in reply to queries over the firm's role in the Regan takeover bid.

Hambros, Regan's financial advisers, and Travers Smith Braithwaite, Regan's lawyers, have both publicly apologised to the Co-operative Wholesale Society (CWS) for their role in the bid, during the course of which confidential CWS documents were obtained by Regan from CWS executives.

But Allen & Overy, advisers to Hambros, and Clifford Chance, advisers to Nomura Bank, which had been planning to fund the takeover, are remaining silent.

During the course of the bid CWS warned Hambros and Nomura that Regan had confidential CWS documents. It also obtained an injunction on 18 April against their use.

But Hambros was quoted in the national press on 24 April as saying that the documents had been “volunteered” to Regan, and that Hambros had taken legal advice, assessed the ramifications and concluded that “we could support our client in developing proposals for an offer”.

Graham Melmoth, CWS chief executive, faxed Allen & Overy's senior partner that day asking for an explanation. “Please let me know what your people were told of the facts and what advice they gave,” he wrote. “If they were given the full picture, and if their advice was as reported in today's press, then I am at a complete loss to understand how they arrived at any such view.”

A spokesman for the firm said that client confidentiality and the ongoing investigation by Norton Rose into events at Hambros, prevented it from commenting. But he said that Allen & Overy would co-operate with the inquiry and that Tudor John had written to Melmoth in reply to his fax.

Nomura, advised by Clifford Chance, was also warned by CWS on 21 April that Regan had obtained the documents. Nomura wrote back to CWS saying that if it had any confidential documentation from CWS it did not intend to use it.

Further legal action may follow. In a separate development, Wilde Sapte was appointed last week to investigate the bid by the liquidators of Regan's bid vehicle, Galileo.

Wilde Sapte partner Richard Scopes is in charge of the investigation for the liquidator Jason Elles of Ernst & Young.

He is believed to be examining the documents to see whether or not Galileo's shareholders can take legal action against Galileo's advisers.