A&O faces fresh conflict storm with dual bid role

Law Society okays A&O to advise bidder and target on KKR deal; Morley made the call for clearance

Allen & Overy

(A&O) senior partner David Morley personally contacted the Law Society to get clearance to act for both bidder and target on a public deal in the Netherlands.

Private equity house Kohlberg Kravis Roberts & Co (KKR) was advised by A&O partner Tony Keal on the banking aspects of its bid for Royal Vendex KBB, which used A&O’s Amsterdam office.

According to Keal, who leads the firm’s leveraged finance group, the Law Society told A&O that “there was no potential for conflict”, a stance which has caused surprise in the City. A&O is still under investigation by the Office for the Supervision of Solicitors (OSS) for its dual role on last year’s Safeway bid.

The dual role on the Dutch deal was cleared by the target, which gave KKR consent. Morley is understood to have contacted the Law Society, which runs the ‘Professional Ethics Guidance Service’, which is available between 11am and 3pm Monday to Friday.

A Law Society spokesperson declined to comment on the specifics of the case, but said: “Anyone providing tangible advice to solicitors will themselves be a solicitor.”

The Vendex deal will reignite the conflicts debate, which was itself kicked off by A&O’s multiple roles on TXU and Safeway. But the Dutch deal has less potential for controversy than A&O’s 2003 involvement on Safeway and TXU because it was run out of separate offices.

However, one City partner expressed surprise that the Law Society believed there was no potential for conflict in the circumstances.
Keal said: “It’s perfectly natural for the regulated to consult with the regulator.”

The Law Society Council is set to approve changes to the conflicts rules in July.