Spanish incumbent reportedly in talks with private equity firms, sovereign wealth fund over stake in infrastructure unit.
Telefonica is in talks with several private equity firms and a sovereign wealth fund about offloading a 49% stake in its infrastructure arm Telxius.
According to sources cited in a Reuters report last week, the PE firms in question are CVC, KKR and Ardian., while Singapore’s sovereign wealth fund, GIC, is also said to be involved.
The report asserted that negotiations are in the final stages and a deal could be reached before March. Telefonica is also said to have hired HSBC to advise it on the sale.
"The idea of Telefonica is to close something shortly, even ahead of its results" on 23 February, said one of the sources, in the report.
Launched in February 2016, Telxius is responsible for managing and monetising Telefonica’s global network infrastructure. It oversees 16,000 cell sites and more than 31,000 km of fibre optic cable.
Telefonica originally planned to monetise the assets via an IPO.
In September, the company said it hoped that floating 36.36% of Telxius would bring in €1.5 billion. However, the IPO was cancelled after Telefonica received what it considered was an inadequate valuation of the unit.
According to Reuters, the deal currently being negotiated is expected to be worth at least €1.47 billion.