Rumors that demand for Telxius shares was light turned out to be more than a little true. Yesterday Telefonica threw in the towel and postponed the IPO of its infrastructure unit due to inadequate demand.
Telefonica had hoped to raise some cash by selling up to 40% of the unit, planning to use the proceeds to help reduce the company's debt load. While the IPO itself is off the table, that general plan may yet come to fruition. Telefonica is continuing to 'analyze strategic alternatives', suggesting that if public money doesn't want it then perhaps strategic or financial buyers might.
Telefonica's debt reduction efforts have faced hurdle after hurdle. Their sale of O2 was blocked by regulators, and plans to IPO that division ran into the fall of the British Pound in the wake of Brexit. Now investors aren't lining up to buy Telxius shares either.
Telxius has a mix of submarine cable and tower assets in its portfolio, a combination that isn't going to appeal to as many potential buyers as more focused groups of assets. It seems to me, therefore, that the company could look to sell subsets of the assets, even individual submarine cable systems.
Of course, we haven't seen too many of those actually change hands in recent years except as part of larger deals like Telstra's buyout of Pacnet and Level 3's purchase of Global Crossing. You can go back a bit further to find a few I guess. One more standalone deal I can think of was TPG Telecom's purchase of PIPE Networks some years back. And then there is NTT's purchase of PC-1 as well.