Telefonica’s Telxius division is expected to debut as a public company next week, and the financial world is currently working on just how to value it. But it appears that demand for shares is coming in on the lighter side of expectations.
According to a report from Bloomberg, Telefonica is expected to narrow the price range for the Telxius IPO toward the lower end of the €12-15 per share that had been projected. In addition, word has not yet come that they have found buyers for the shares on offer. Telefonica has been looking to sell as much as 40% of Telxius as it seeks to raise cash to reduce debt. Should they get what they want at the lower end of the range, it appears Telxius as a whole will be initially valued at $3.35-3.40B.
Telefonica moved an extensive collection of submarine cable and international network assets as well as a portfolio of towers into Telxius earlier this year, creating an international infrastructure division. They are not the first global telecommunications operator to seek to monetize infrastructure assets of course. India’s Reliance sought for several years to sell or IPO its Globalcom division before rebranding it as Global Cloud Xchange and taking a more organic route. And in the USA, Windstream actually did spin off its network infrastructure as the REIT CS&L last year.
I’m curious what path Telxius might take following the IPO. CS&L has made two acquisitions since its spinoff from Windstream, staking out its own claim as an independent force. Might Telxius do the same? Or would their fate remain tightly bound to that of Telefonica, which for now at least would remain the majority owner.
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