Safety in numbers

24 March 2003

When it comes to news management, France Telecom s E15bn rights issue may rival the war on Iraq. With 21 banks on the deal potentially sharing a E200m payout independent analysis of the transaction will be thin on the ground.

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France Telecom has appointed 21 banks to manage the E6bn public tranche of its E15bn rights issue.

The banks have agreed not to publish research on the company before the deal completes, although their analysts are free to talk to clients about FT, a person familiar with the situation said.

The banks will in aggregate earn base underwriting fees of just less than 2.5% of the capital raised, the person added.

FT may also pay a discretionary incentive fee based on the performance of the deal. If paid in full, this could lift the total deal fee to just more than 3.25% of the capital raised, the person familiar with the situation said.

To read an accompanying article analysing the transaction, <a href="http://www.breakingviews.com/ve.asp?lid=1&sid=5981">click here</a>.

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