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Report claims Barclays, UBS, Morgan Stanley to take leading role in mobile operator’s stock market debut.
Telefonica has selected a group of investment banks to manage the hotly-anticipated IPO of its O2 UK unit.
Sources cited in a Telegraph report on Saturday said that Barclays, UBS, Morgan Stanley, plus an unnamed fourth investment bank will take leading roles in the process. Secondary roles are expected to be allocated to a further six banks, the sources said.
According to a separate report by El Economista, the O2 UK IPO will take place early next year.
"We think it is likely that Telefonica will look to sell close to 40% of the asset," said Haitong Research, in an investor note on Tuesday. "We value O2 at €12.2 billion (£10.6 billion) and therefore a hypothetical sale of a 40% stake in the company would allow the company to generate cash of roughly €4.8 billion."
An IPO has been on the cards since Telefonica’s bid to sell O2 to local rival 3UK was blocked by the European Commission earlier this year. A float would raise funds that would help Telefonica pay off some its hefty debt.
"We naturally believe the scenario of a full sale of the asset would be more interesting for the company, not only because the deleveraging impact would be higher, but also because selling control would probably enable Telefonica to extract a better multiple from the transaction," said Haitong.
However, the failed sale to 3UK makes it unlikely that O2 will be sold in the near term, the brokerage said, adding that "in this timeframe, Telefonica needs alternatives to reduce its debt load."
