If Orange bought Mr Schmid’s stake outright, this would trigger a full bid for MobilCom, forcing Orange to buy minority investors’ shares and forcing France Telecom to include MobilCom’s debt on its balance sheet. This would undermine its debt reduction plans.
So rather than paying cash, France Telecom hopes to swap shares in its Orange mobile unit for Mr Schmid’s MobilCom shares. And rather than being held by Orange, the MobilCom shares may then be held by banks acting on France Telecom’s behalf.
