Telefonica makes threefold retreat from flotation

Spanish telco Telefonica has pulled the IPOs of three subsidiaries having watched the price of its mobile arm plummet before its launch later this week.

The offering of Movile looks set to raise only E4.6bn (£2.7bn) from a diluted offering, considerably down on the E9bn (£5.4bn) expected earlier in the year. Matt Hanrahan, analyst with the Bloor Group, said: "It makes sense for them to hold back, given the state of the market after the 3G licences. Earlier this year the telcos were all happy puppies, but this bear market has depressed share prices and made it difficult to raise cash." Cesar Alierta, chairman of Telefonica, said: "The strategy of the company is not to proceed with other IPOs unless it were necessary to so to unlock value." The companies withdrawn from sale were the media, data transmission and underwater cable divisions. From 1996 until June 2000, Telefonica was under the control of the flamboyant and controversial Juan Villalonga who adopted a policy of non-stop acquisitions. His aim was a stock market launch.