TEF Telefonica SA

   By Jeannette Neumann 
 

MADRID--Telefónica SA (TEF) said it is suspending the initial public offering of its Telxius infrastructure unit because offers from potential investors "undervalued the business."

The scuttled deal throws a wrench in the Spanish telecommunication giant's efforts to quickly raise funds to whittle down more than EUR50 billion ($56.1 billion) in debt. The company is seeking to ease concerns among investors and credit rating firms that it is taking steps improve its financial health.

Telefónica said it will continue to explore other alternatives for the Telxius unit, according to a regulatory filing published Thursday.

Earlier this month, Telefónica said it planned to float a minority stake of at least 25% of the infrastructure unit before year's end.

The Madrid-based company is separately laying the groundwork for a potential IPO of its British mobile operator O2. The company tried to sell the U.K. unit to CK Hutchison Holdings Ltd. (0001.HK) last year, a deal which was eventually quashed by the European Commission.

Credit-rating firms such as Moody's Investors Service have said they want to see Telefónica make progress on paring down its debt to maintain its credit rating. Investors have been concerned that the company's debt could jeopardize its dividend. Telefónica has said its dividend this year is covered.

Write to Jeannette Neumann at jeannette.neumann@wsj.com

(END) Dow Jones Newswires

September 29, 2016 12:53 ET (16:53 GMT)

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