The fact that Brunswick has scooped both ends of what could be the largest European retail banking merger was bound to give rise to sour grapes in some quarters of the financial PR community.
The fees Brunswick will get for the work done on the £8.8bn deal by partners Susan Gilchrist, who has worked for Abbey National since 2000, and John Sunnucks, who was brought in to act for Grupo Santander on its bid for Abbey National, will have made most senior financial PROs' mouths water and had others choking on their cornflakes in fury that they did not get a slice of the action.
Conflict of interest?
It seems likely that envious PROs could still get a look in if HBOS moves from taking a hard look at Abbey to making a serious offer. Abbey head of media relations Christina Mills says that as the senior client, it has already been assured that Brunswick will resign the Santander account if the bid is contested.
But the fact that Santander is prepared to take the second-class client treatment has led some practitioners to question the bank's understanding of the market it wants to buy into.
'Santander really wants this deal and probably thinks that it is all sewn up,' says one senior City PRO. 'It could be that as a Spanish bank it is unfamiliar with the way deals like this develop in the City and how quickly they can become contested.'
Santander itself will not comment on the arrangement, though a source close to the bank stressed that the agreed nature of the deal and the use of separate Brunswick teams had assuaged its concerns.
While the likelihood that the bid will be contested increases with each day that passes, it is even possible that Brunswick will not resign the account.
Citigate Dewe Rogerson was brought in to advise French bank Banque Paribas on its 1999 attempted merger with Societe Generale. When the deal was wrecked by the hostile intervention of Brunswick client Banque National de Paris (which later acquired Paribas), CDR continued to advise Paribas and SocGen on the hostile bid.
But that situation, as CDR managing director Patrick Donovan explains, was rather different. 'Advising on both ends of a deal can work if there is a commonality of interests, as was the case in SocGen's (attempted) merger with Paribas. But if you look at Abbey/Santander there are quite different issues that are specific to each of the two companies,' he says.
'This would make the task of pushing forward a unified communications programme very difficult, particularly now that there is speculation that a third party might join the fray,' he adds.
In the initial stages, the most obvious conflict of interest would seem to be Brunswick's position advocating a deal that some of the press are already slating as bad for Abbey shareholders.
On 4 August, the Daily Mirror, arguably important for Abbey's high number of individual shareholders, said the deal was 'not that great' because the Santander shares Abbey shareholders would get 'will be hard to sell in the UK as they are not traded over here'.
Some of the hostility to the deal could be down to Europhobia or a simple ignorance of Santander, which is Spain's largest retail banking group.
But this would appear to be a very different communications challenge for Brunswick advising Santander than for Brunswick advising Abbey.
Convincing Santander shareholders they are getting a bargain while telling Abbey shareholders that they are getting a good price all out of Brunswick's offices would also seem to create some conflicts but, at Abbey, Mills insists the arrangement will actually make communications more efficient.
'We can pass information backwards and forwards slightly more quickly even though that information is flowing down separate channels,' she says.
Others argue that as the PR firm is not as embedded in the deal as the separate law firms and banks, the fact that it is working for both sides is largely irrelevant.
UCB head of corporate communications Laurence Battaile hired Brunswick for his company's takeover of Brunswick client Celltech and says the firm's work was 'more a polishing-up exercise'.
The power of one voice
M Communications founder Hugh Morrison points out that agreed deals need to move on quickly from negotiations around the takeover to communicating the changes that will follow.
'As soon as the deal is agreed, one voice is much more powerful than two, as it does not help to be fighting each other when you are trying to move towards the integration of two separate organisations,' says Morrison.
Brunswick's situation on the Abbey takeover might be unusual but it is certainly not unique and may actually help the Abbey/Santander merger run more smoothly.
How serious any potential conflict of interest is will only be apparent if another serious bidder emerges. But whatever happens, Brunswick will have had a nice little earner.
CASES OF PR FIRMS DOUBLING UP
- 1999 Banque Paribas hires Citigate Dewe Rogerson to advise it on its agreed merger with Societe Generale. The firm continues to advise the former after Brunswick client Banque National de Paris makes a hostile bid for both banks, ultimately acquiring Banque Paribas to form BNP Paribas
- 2001 Royal Caribbean drops Gavin Anderson for Brunswick. Brunswick advises Royal on its agreed merger with P&O Princess Cruises before resigning the Royal account after a hostile bid from rival cruise operator Carnival, a client of The Maitland Consultancy. Carnival acquires P&O in April 2003
- 2002 Financial Dynamics client and venture capitalist Cinven makes a £2bn joint bid with L&G Ventures for Nomura's 4,300 pub chain. FD also brought on board to advise Nomura. Sale proceeds by private auction
- 2003 Credit Lyonnais and Credit Agricole agreed merger. Banks employ M Communications to joint ly announce the deal and handle subsequent PR.