Digifone staff may get bonus

The 750 employees of mobile phone operator Esat Digifone, who missed out on a share bonanza when Esat Telecom was bought by British…

The 750 employees of mobile phone operator Esat Digifone, who missed out on a share bonanza when Esat Telecom was bought by British Telecom (BT) for $2.5 billion, may yet get a bonus.

Digifone accounts for virtually the entire $2.5 billion valuation BT's offer places on Esat, if BT's purchase of the pivotal 1 per cent stake held by Mr Dermot Desmond's investment company IIU, is used as a yardstick. The Digifone employees had no Esat shares and did not benefit from BT's $100 a share offer. Esat's 1,200 staff received windfalls.

Esat Digifone chief executive Mr Barry Maloney, who stands to receive up to $50 million for his 2 per cent non-voting shares, has offered to donate an undisclosed amount of his windfall to a fund for Digifone employees. A group of senior Digifone managers, who had phantom share options which were triggered by the BT bid for Esat, have as a group offered to match Mr Maloney's contribution.

Mr Maloney could not be contacted last night, but it is understood that the sum he will put into the employees' fund will depend on several factors, including how much he actually gets for his shares and also the willingness of other major beneficiaries of Digifone's success, specifically Esat chairman Mr Denis O'Brien and Mr Desmond, to match the contribution.

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Mr O'Brien will gain £230 million from the BT deal while Mr Desmond's IIU has realised $139 million (over £100 million) in two tranches from the sale of its 10 per cent of Digifone. It is understood that PricewaterhouseCoopers will value Mr Maloney's shares and the phantom stock options held by the Digifone senior executives on the basis of the deal where BT bought Mr Desmond's 1 per cent stake in Digifone for $25 million.

One source close to Mr O'Brien claimed Mr Maloney was using the offer to pay a bonus to employees as a lever to get the full $50 million that his stake is worth based on this formula, but that Mr Maloney's non-voting shares did not carry the same value as those with full voting rights.

This interpretation was flatly rejected by sources close to Mr Maloney, who said that the value of his stake and the management phantom stock options is based on the valuation on Digifone from the Dermot Desmond and Telenor deals.

British Telecom is said to be well-disposed towards making a goodwill payment to Digifone employees, as is Telenor despite opposing offering Esat share options to Digifone employees two years ago.