Telefónica to float telco towers unit

Spanish telecoms giant Telefónica has confirmed plans to go ahead with the IPO of Telxius, its infrastructure subsidiary.

Telxius manages a portfolio of about 16,000 wireless telecommunication towers in Spain, Germany, Brazil, Peru and Chile as well as 31,000km of fibre optic submarine cables. It was formed by Telefónica in February so as to run its infrastructure business as a separate division.

The company had hit pause on the planned IPO following Britain’s vote to leave the EU in June, throwing doubt as to whether the transaction would go ahead. However, Telefónica now appears keen to raise capital after the European Commission blocked the merger of o2, its UK subsidiary, with rival operator Three in May.

In a statement, Telefónica said that it is willing to remain a majority shareholder in Telxius after the offering, which is expected to take place within the next few months. Shares will be listed on the Barcelona, Bilbao, Madrid and Valencia stock exchanges.

The IPO of Telxius would mirror the move its compatriot Abertis made last year, spinning off 55 percent of its telecoms tower arm, Cellnex Telecom. America Movil also last year spun off its towers subsidiary Telesites through a public listing.

On the private side, Danish telco group TDC chose to sell its Swedish subsidiary to Tele2 in June in a deal worth kr2.3 billion ($344.7 million; €309.1 million).