Telefonica Said to Plan to Narrow Telxius Range to Low End

  • Investors have expressed demand at closer to 12 euros a share
  • IPO’s new price range expected to come as early as Tuesday

Telefonica SA is expected to narrow the price range in the initial public offering of infrastructure unit Telxius Telecom SA toward the low end of its estimate, based on demand from institutional investors, according to people familiar with the matter.

Investors have shown interest in buying at the low end of the range of 12 euros to 15 euros a share, the people said, asking not to be identified because the deliberations are private. Telxius hasn’t yet told investors it has demand for all the shares on offer, two days before the sale is scheduled to end, the people said.

Advisers usually tell the market as soon as an IPO has demand for all the stock that’s for sale. A new price range may come as early as Tuesday, one of the people said. Telefonica offered to sell up to 40 percent of Telxius in the IPO. No final decisions have been made on the range, they said.

Telefonica is likely to go ahead with the IPO as it needs cash to reduce debt, the people said. Pricing will be fixed on Sept. 29 and the listing of Telxius shares is planned for Oct. 3. The current range has a midpoint of 3.38 billion euros ($3.8 billion) for the unit’s total value. That’s below the 3.5 billion euros Telefonica sought, people familiar with the matter said previously.

A spokesman for Telefonica declined to comment.

The Telxius sale faces investor concerns over how to assess the division’s submarine cable assets, people with knowledge of the matter said previously. The IPO will also be an early test of investors’ appetite for new listings after the U.K.’s decision to leave the European Union roiled stock markets this summer.

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