Getting the deal done

The spectacle of France Telecom’s short put position on mobile telephone operator Orange going badly awry last month highlighted the dangers of using equity derivatives to sweeten a share-financed acquisition. The French group reportedly suffered a book loss of around E375 million when German utility Eon exercised a put, forcing France Telecom to buy Eon’s 2.1% stake in Orange for about E1 billion – at a strike price 65% higher than spot.

Clearly, when France Telecom gave Eon the option durin

To continue reading...

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: