Telefónica in talks to sell 49% stake in Telxius

By:
James Pearce
Published on:

Reports from Reuters claim the Spanish operator is looking to offload a stake in its infrastrucutre arm months after it cancelled an IPO

Telefónica has been locked in talks with private equity firms about offloading a 49% share in infrastructure arm Telxius, according to reports.

Citing sources familiar with the matter, Reuters claims the Spanish operator has began hiring advisors about a potential sale of Telxius, which looks after its mast and subsea cable portfolio, following cancellation of a €1.2 billion IPO last year.

Telefónica withdrew plans to list part of Telxius in September citing weak investor demand for the share sale. The Spanish operator is looking to sell off assets to reduce debts of around €50 billion.

The sources reportedly told Reuters that Telefónica is looking to strike a deal before March, with private equity firms KKR, CVC and Ardian linked, alongside sovereign fun GIC.

The report prices the deal at around €1.47 billion, but was unclear on what form an offer will take. It could be a joint offer between GIC and CVC, or KKR could partner with Ardian, or KKR, GIC and CVC could partner, according to sources.

It remains to be seen how any deal for Telxius would impact Telefónica’s plans for its UK arm. The Spanish operator had reached a £10.25 billion agreement to offload O2 to Three-parent CK Hutchison, only to see it blocked by the European Commission over concerns around competition.

O2 UK has since been linked with a management buyout from former CEO Ronan Dunne, now at Verizon, and an IPO, which Telefónica has admitted is an option.