To recap, Warburg bought the shares for 395.75p while the market price was close to 418.5p - giving the broker a nominal pounds 44m profit.
As Warburg began to place the shares with institutional investors, however, the deal started to go wrong. In a falling market, Orange shares slipped below the 399.5p minimum price below which Warburg had insisted it would not sell. At the end of the day, the broker was left with a large chunk of stock.
Just how large that holding is became clear yesterday, when Warburg was forced to reveal that had been left with 52.5 million Orange shares - more than a quarter of the stake it took over from BAe.
Given the recent weakness in Orange's share price, the numbers do not look good. Assuming all the shares it placed fetched at least 399.5p, Warburg made a cool pounds 5m on the shares it sold. However, that profit is entirely wiped out by the loss on the stake Warburg held on to. Orange shares yesterday closed at up 1p at 380.5p after once having been as low as 371p. At that price, Warburg's stake is worth pounds 8m less than it paid for it, ostensibly leaving the broker nursing a pounds 3m loss on the deal.
Predictably, sources at Warburg scoff at this figure, arguing that it takes no account of the broker's hedging policy. Equally predictably, they refuse to shed any light on that policy. Given that there is no chance Warburg will ever officially reveal how much it made or lost on the deal, all the rest of us can do is guess.
The market continued its recent drift yesterday, dropping away in the middle of the day before a strong Wall Street opening helped it to shrug off sterling's renewed strength. The FTSE 100 index closed up 20.3 points at 5932.2.
The insurance sector took a knock after United Assurance revealed disappointing new life sales figures and increased its provision for pensions mis-selling by pounds 100m to pounds 170.6m. United shares dropped 26p to 585p, helping to drag down Sun Life & Provincial, down 14p to 578p and Prudential, 14p lighter at 878p. The same factors and a NatWest downgrade pulled at Royal & SunAlliance, off 13p at 761p.
Hays, the business services group, surged 42p to finish at 1073p, close to its all-time high, after a positively received management conference with institutional investors.
Fortunes contrasted in the pharmaceuticals sector. Investors dumped Smith & Nephew, making artificial skin from babies' foreskin, after US regulators warned its joint venture partner that manufacturing facilities were not up to scratch. The shares slumped 12p to166p.
But Chiroscience, the biotechnology group, surged 60p to 323.5p after revealing a licensing deal with drug giant Zeneca to distribute its Chirocaine anaesthetic. Zeneca shaded 11p to 2574p.
Racal Electronics continued its recent surge, rising 9.5p to 339.5p after broker Dresdner Kleinwort Benson slapped a 370p price target on the shares. Last November, shares in Sir Ernest Harrison's vehicle briefly touched 201p.
Ladbroke shook off the decision by President of the Board of Trade, Margaret Beckett, to refer its acquisition of the Coral betting shops from Bass to the Monopolies and Mergers Commission, rising 3.25p to 334.5p. Bass slipped 10p to 1145p.
GWR, the radio group, gave up 14p to 178.5p after warning of lower than expected profits at Classic FM. The news helped drag rival Capital Radio down 39p to 705p, which spent the day updating analysts on its radio and restaurants divisions.
An upbeat set of results lifted Druid, the IT consultancy which specialises in implementing SAP software. The shares, floated at 275p at the end of 1996, closed up 16p at 841p. Fellow SAP specialist Diagonal, which firmed 7.5p to 907.5p, has enjoyed a similarly meteoric rise.
The gloss was taken off Rage Software when it revealed that managing director Paul Finnegan and his wife had sold a total of 106,000 shares, raising pounds 13,250. The stock has soared from 4p to 15p in the past month on back-to-back deals with computer giants Compaq and Sega. The shares slipped 0.5p to 11.5p.
Meanwhile Bluebird Toys, the Polly Pocket to Plasticine group which is on the receiving end of a 111p bid from toy giant Mattel, slipped 2p to 109.5p. Mattel has exercised rights to manufacture Polly in North America, a move which will decimate Bluebird's margins and reduces the chance that shareholder Guinness Peat Group, which had bid 101p, will come back with a higher offer.