The chief executive of Yell, the telephone directories business which yesterday moved a step closer to flotation, was paid a £3m bonus by the company's former owner BT for helping sell it to a consortium of venture capital firms one year ago.
On top of the bonus, John Condron is set to receive shares in Yell worth more than £15.5m when it floats in London next month. Finance director John Davis will get £6.5m worth of shares.
The big winners, however, are Apax Partners and Hicks Muse Tate & Furst, the venture capital firms which bought the owner of Yellow Pages from BT for £2.1bn in June 2001.
They will see the £650m of cash they invested in Yell double in value at float. They are also getting a £50m management fee from Yell. Advisers Merrill Lynch, Goldman Sachs and JP Morgan will share £40m in fees.
Yell yesterday announced that its shares will be priced at 270p to 345p when they float on July 3, valuing the business at £1.8bn to £2.3bn. Including debt it will have a total value of up to £3.5bn.
But the price tag is £500m lower than originally expected as the company's advisers try to get the business away in a tough market for new issues. Pubs group Punch Taverns was recently forced to slice its offer price by 10% to get its shares away in a market spooked by the poor debut of music and books retailer HMV last month.
The news came as another company once part of the BT empire announced that it has paid bonuses to its three most senior directors totalling more than £500,000.
Wireless network mmO2, which used to operate under the Cellnet brand in the UK, has seen its share price more than halve in value since it was demerged in November. Yesterday, however, the company revealed that senior management are being given performance bonuses.
In its annual report mmO2 said chief executive Peter Erskine is getting a bonus of £250,000 on top of a salary and benefits package worth £481,000. Included in the bonus is a £25,000 payment for successfully steering the business to flotation.
Finance director David Finch received a bonus of £145,000 on top of a salary and benefits package worth £250,000.
