FT Wants More Orange
The buyout, which would see Orange come under full control of its majority shareholder, is expected to bolster France Telecom’s attempts to chip away [Ed note: Shouldn't that be frites away?] at its €49.3 billion ($54.1 billion) debt mountain.
France Telecom’s chairman, Thierry Breton, said he expects Orange to be “an additional trump card in the transformation of France Telecom.”
Orange, regarded as the "cash cow" of the entire France Telecom group, today announced healthy results for the first half of 2003. The wireless carrier reported a 67.6 percent rise in operating income to €2.1 billion ($2.3 billion), by far the most impressive growth figures within the group (see Orange Ups H1 Revenues).
According to Breton, approximately 40 percent of France Telecom’s free cash flow will be generated by Orange once the mobile operator is under full FT ownership.
Orange will remain a separate company with its own board of directors and management, Breton added.
France Telecom’s offer to gain complete control of Orange is scheduled to open on September 12, close on October 7 and settle on October 24.
Shares in Orange rose 11.11 percent to €9.47 ($10.38) as a result of the announcement, while France Telecom’s stock slipped like a greasy camembert, falling 3.89 percent to €21.72 ($23.82). The French incumbent also announced its financial results for the first half of this year (see FT H1 Income Up, Debt Down).
— Justin Springham, Senior Editor, Europe, Unstrung