Denmark has cracked down on enforcement of its no-conflict rules, allowing foreign firms to capitalise on a private equity boom, says Lesley McColl

Although it has always been forbidden for Danish firms to act for more than one bidder at a time in auctions – Chinese walls are banned – the authorities are now enforcing the rules more stringently. The effect on the legal market has been marked. Some of Denmark’s players have been fined by the Bar Association for breaching these rules, which were tightened up in May 2005. It also directly shapes client relationships and firm growth strategies, and the impact is exacerbated by the current boom in the M&A market.

The pickings may be rich, but with local firms unable to take full advantage of them, some fear that the time has never been better for international firms to consider entering the market. Danders & More managing partner Anders Hansen says: ‘With all the private equity, it is bound to happen. After opening up in Sweden, Ashurst landed some spectacular mandates.’ Not everyone is so convinced, however. Søren Johansen, managing partner at Kromann Reumert, believes that the market is still not enticing enough for foreign firms to make an investment. ‘The market demographics are different,’ he says. ‘If I was Ashurst’s managing partner and was looking at my growth prospects, I wouldn’t have Denmark in my top-five list.’

Even then, Johansen thinks you would need to have a few international firms enter the market before you saw any impact, a view that Christian Kjølbye, a partner at domestic Danish firm Plesner Svane Grønberg, agrees with. ‘Copenhagen is not at the top of their list,’ he asserts. ‘I think people are looking at their options. I don’t think we will see a whole transition like in Germany.’

Nevertheless, the market has never looked better. The private equity industry now makes up around 50% of the M&A market in Denmark, and firms are predicting a succession of private exits from the market over the next few years, creating several deals as impressive as TDC, the largest LBO in Europe to date.

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