Telephone stands for a bad response – The Economist

On the way you were 19.6 million euros that the firm was going to split commissions.

Telephone lost 1,500 million euros that missed. Photo File: Reuters

the Telephone changed their plans after the weak appetite shown by investors to set prices.

The business of submarine cable is the key factor. Investors have had difficulties to put a value on this part of the business, which reports 57% profit.

Telxius has more than 65,000 kilometers of submarine fiber optic cable, of which around 31,000 are in the property.

On the part of the business management of towers, investors had two references: the Spanish Cellnex and the Italian Inwit. But submarine cable was not so. Only the american Level 3 presented similarities.

Also, the investors doubted about the potential conflict of interest that could generate, due to the presence of Telefónica as the main customer and majority shareholder of the company.

Rejection of u.s.

The road show in Europe was going well and showed appetite. The problem was when they crossed the pond. In the US the company met with investors more demanding of the submarine cable and gave them back.

Both Goldman Sachs as JPMorgan tried without success the search for an investor anchor that came with a major command and dragging the rest and will surely encourage more demand.

Before the summer, volatility was high for the Brexit. The situation has improved now, but investors remain cautious for the US elections, the decisions of the Fed and other risk factors.

Telephone hired 12 banks to get ahead with the operation with different roles.

Some of these firms criticize the excessive role of Goldman Sachs and JPMorgan. Between the entities themselves has circulated information that was not entirely correct, according to sources of a bank.

millions of dollars in Losses

The cancellation of the public offer of sale (OPV) of Telxius leaves several homeless. In addition to its owner Telefónica, which saw it as wiping out your expectations of attracting up to 1,500 million euros with the operation, also went out hurt the banks directors, underwriters, and underwriters of the offer.

On the way you were 19.6 million euros that Telefonica was going to pass out in concept of commissions.

The number, calculated on a price drop of 13.5 euros which was located in the middle band of prices fixed for the landing in a Bag of Telxius, meant that the banks assuming the risk of positioning and securing the issuance of shares of the subsidiary of infrastructure, Telefónica is going to hand out something less than 1.5% of the total amount of the operation. The figure was far less than the old fee structures that filled the pockets of the banks who were lying and claimed the big IPO until the past decade.