Telefonica will sell up to 40 per cent of its infrastructure unit Telxius in an initial public offering, raising around €1.5 billion.

Telefonica will sell around 91 million shares – 36.36 per cent of Telxius’ share capital – which can be increased to a maximum of up to 40 per cent if the green shoe option is fully exercised over 10 per cent of the shares initially sold, the operator said in a statement.

The price gives the entire unit a valuation of between €3 billion and €3.75 billion.

With the shares priced between €12 to €15, it “gives a range with a midpoint of €3.38 billion for the unit’s overall value, below the €3.5 billion Telefonica sought,” said Bloomberg. 

After fees, the company, which is selling the stake to reduce debt, could reportedly walk away with €1.2 billion.

The report added that investors may be concerned about how to assess Telxius’ submarine cable assets and may want to put a lower price on these operations, which make up around 60 per cent of revenue and profit, than what they are willing to pay for the unit’s wireless towers.

The final price of the offer is expected to be set on 29 September and share trading on the Spanish stock exchanges of Madrid, Barcelona, Valencia and Bilbao will commence 3 October.

Telefonica said it established Telxius with the goal of capturing “exponential data traffic growth expected over the next several years” and wants to provide it “with the best tools to capture such growth potential”.

The IPO plans suffered a delay thanks to the market turmoil following the UK’s European Union exit referendum, but now seem to have regained momentum.

Telxius holds assets including around 16,000 wireless towers in Spain, Germany, Brazil, Peru and Chile, and an extensive fibre network.