Debenhams sale sees CC, Ashursts conflicted

Conflicts at Clifford Chance and Ashurst Morris Crisp look likely to hand another law firm a sought-after public M&A instruction from private equity houses CVC Capital Partners and Texas Pacific Group.
Clifford Chance is acting for Permira, the first bidder to show an interest in ailing department store Debenhams, with which Ashursts has a longstanding relationship.
A second consortium, believed to be led by CVC, together with Texas Pacific and entrepreneur John Lovering, has put together a rival bid for the department store.
CVC’s preferred firm is Clifford Chance and its secondary adviser Ashursts. Clifford Chance, the preferred adviser of CVC and Permira, has been a victim of its own success. Private equity star Mathew Layton is advising Permira on the Debenhams deal, but sources at the firm say it is inconceivable that Clifford Chance’s CVC relationship partner James Baird would be allowed to run a separate Chinese-walled team to advise it.
The Debenhams battle is a complex public M&A deal already fraught with conflict issues because Debenham’s management is in bed with both consortia. However, CVC’s secondary adviser Ashursts has been acting for Debenhams since its demerger from the Burtons Group (now Arcadia) in 1998.
Sources say that the CVC consortium has yet to appoint a legal adviser. CVC has recently used Linklaters, which completed its first deal for the private equity house on a buyout of Kwik-Fit from Ford last August. A further instruction on a major public deal would significantly strengthen the relationship. However, at the time of going to press Linklaters had not been instructed.
Slaughter and May scooped a mandate from CVC on last year’s acquisition of Iberola. Clifford Chance had accepted an instruction on the debt side from Deutsche Bank, and CVC’s Spanish law firm Uría & Ménéndez referred the work to best friend Slaughters. One other option is Texas Pacific’s sometime law firm Weil Gotshal & Manges, but at the time of going to press the firm had not been approached.