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Deal insider: Orange plc proves no lemon


Issuer: Orange plc
Amount: $700 million

Type of deal: equity IPO

Completed: April 3

Lead managers: Goldman Sachs,

Dresdner-Kleinwort Benson

"I'd like to know what is happening to your arpoos," asks the female analyst. "I beg your pardon," responds Hans Snook, chief executive of Orange, wondering if this is a rude question. It's not. "Your RPUs - revenues per unit." A typical telecoms question.

But investors obviously liked the responses they got from Snook and his team, because Orange, the UK mobile-phone company, which issued $700 million of equity at the end of March, was 10 times oversubscribed - a result that was all the more surprising because Orange has never made a pre-tax profit and won't until 1998 or 1999.

Orange, the newest entrant to the UK mobile-phone market, and subject of the largest IPO so far this year in the UK, remains a controversial stock to value. Before its share offer was launched in March, investment banks produced widely different valuations of the company, ranging from one hopeful Japanese firm's estimate of £3.9 billion ($5.9 billion) to a more sceptical UK broker's £1.7 billion.

The float was talked about for six months before its official announcement.

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