Telefonica is looking to sell a 49 per cent stake in its infrastructure unit Telxius and is in talks with private equity firms KKR, CVC and Ardian as well as sovereign fund GIC, Reuters reported.
A deal could fetch at least €1.47 billion based on the valuation of a failed initial public offering (IPO) of the business in September.
Telefonica hired HSBC as an advisor and talks are at a final stage, as the operator wants to agree a deal before March. In fact, a deal could even be announced before Telefonica releases full-year earnings on 23 February.
“The deal is going fast, faster than a non-binding and binding offers process. The idea of Telefonica is to close something shortly, even ahead of its results,” a source told Reuters.
GIC and CVC could make a joint offer, KKR could team up with Ardian, or KKR, GIC and CVC could all bid together, sources revealed.
The private equity companies are asking Telefonica to enter into a shareholders pact so they can have a say in the management of Telxius.
A sale would help reduce Telefonica’s debt, which stands at around €50 billion, and analysts believe it may pave the way for the operator to once again try to raise money from O2 UK, the report said.
The move also shows Telefonica sees value in owning network infrastructure, given it would still own a 51 per cent stake in Telxius.
Telxius holds assets including around 16,000 wireless towers in Spain, Germany, Brazil, Peru and Chile, and an extensive fibre network.