Snook's earnings could top œ100m after French connection
Andrew Lorenz
Bright future: Hans Snook
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HANS SNOOK, Orange's chief executive, could take his eventual earnings from the successive takeovers of his mobile-phone business to more than œ100m thanks to this week's expected œ24 billion purchase of the company by France Telecom.
France Telecom, which The Sunday Times revealed last week had raised œ20 billion in bank backing for a pre-
emptive Orange bid, has secured the continued services of Snook and his key executives by committing to refloating the company later this year in London and Paris.
Snook, who is reckoned to have made about œ45m from the takeover of Orange by Mannesmann last year and Vodafone's subsequent acquisition of the German group, now stands to make as much again through running the new Orange public company.
France Telecom is expected to retain a majority stake in new Orange. But the planned reflotation of the business, which first joined the stock market four years ago valued at œ1 billion, will enable it to win over Snook and his team while recouping part of the hefty price it will pay Vodafone for the business.
In total, Orange is expected to cost France Telecom about œ30 billion - œ24 billion in cash and shares to Vodafone, œ2 billion in Orange debt and the œ4 billion price that Orange is paying the government for its 3G (third generation) mobile licence.
Up to 60% of the œ24 billion will be in cash. Vodafone will end up with a stake of about 10% in France Telecom. That shareholding will be governed by a complex "collar and cap" deal, which will limit Vodafone's upside and downside while setting a timeframe in which Vodafone can sell down the holding.
Snook, his deputy and finance director, Graham Howe, and other top Orange executives had until recently opposed Vodafone's desire to abandon its original plan to float Orange back on the stock market.
Instead, Vodafone got European commission approval to sell the business to a trade buyer. France Telecom positioned itself to win the company - but was then faced with the threat of a walkout by Orange's management.
Michel Bon, France Telecom's chief, has found an elegant solution to that conundrum. The company that returns to the market will be a bigger Orange - Bon will inject its mobile operations in France, the market leader, plus its interests in mobile licences in Belgium, Greece, the Netherlands, Egypt, Lebanon and India. He will then launch the flotation.
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