Morgan Stanley 2001 Annual Report Download - page 22

Time is the ally of the successful working relationship. Over time, Morgan
Stanley people can gain an ever more intimate understanding of a client’s needs.
We can find new ways to meet those needs and to anticipate them, earning the
chance to prove ourselves in new areas. We can over-deliver on each transaction
and demonstrate our desire to stay close to the client even with no transaction at
hand. Time gives us the opportunity to distinguish Morgan Stanley again and
again: through the quality of our people, our insights and our execution, applied
consistently in the client’s interest.
WORKING RELATIONSHIPS
FRANCE TELECOM/ ORANGE
Morgan Stanley’s relationship with France
Telecom has allowed us to provide consis-
tent financing and strategic advice. In
February 2001, Morgan Stanley managed
the landmark €6.3 billion initial public offer-
ing of shares in Orange Wireless, France
Telecom’s mobile phone service subsidiary.
Despite a historically difficult market,
Morgan Stanley helped to pull off one of
the largest-ever IPOs. A simultaneous
€3.1 billion issue of France Telecom bonds
exchangeable into Orange shares, also
managed by Morgan Stanley, was the
largest-ever euro-denominated exchange-
able debt offering. These capital-raising
initiatives helped France Telecom finance its
2000 acquisition of Orange, a transaction in
which we advised France Telecom. In total,
Morgan Stanley helped France Telecom
raise approximately €40 billion in 2000
and more than €45 billion in 2001 from
the equity, bond and bank debt markets.
GUCCI
Morgan Stanley has worked closely with
Gucci since before its 1995 IPO, which
we lead-managed. When competitor LVMH
began to accumulate Gucci stock in early
1999, Morgan Stanley helped Gucci thwart
a takeover through an issue of shares to
an Employee Share Scheme and, subse-
quently, of 42 percent of the company to
Pinault-Printemps-Redoute (PPR). Using the
PPR $3 billion capital injection, Gucci rap-
idly established itself as a multi-brand
fashion house by acquiring the labels of
Yves Saint Laurent, Boucheron, Sergio
Rossi, Stella McCartney, Alexander
McQueen and Bottega Veneta. In 2001,
Morgan Stanley brokered an innovative
agreement between Gucci, PPR and LVMH,
facilitating an exit for the latter and the
settlement of all pending litigation, as well
as providing for an extraordinary dividend
for independent shareholders and downside
protection on the share price until 2004.
EXCHANGE-TRADED FUNDS
One of the fastest-growing investment
products, exchange-traded funds (ETF)
are baskets of stocks that closely track a
specific market or sector index. Because
they trade as ordinary stocks on major
exchanges, ETFs offer investors greater
convenience and efficiency than tradi-
tional index funds. The success of ETFs
has fueled our relationships with leading
issuers such as The Bank of New York,
Barclays Global Investors, State Street
Global Advisors and The Vanguard Group.
These ETF sponsors now rely on us not
only as a major broker-dealer, liquidity
provider and key marketer but also as a
vital resource to help them navigate the
ever-changing and diverse regulatory
requirements of the world’s equity mar-
kets as they introduce new ETF products.
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