By Ruth David, Manuel Baigorri, Rodrigo Orihuela, Bloomberg

Telefonica SA canceled an initial public offering of its infrastructure unit, Telxius Telecom SA, after demand from investors proved inadequate.

Telefonica will continue “to analyze strategic alternatives” for Telxius, the Spanish carrier said in a statement Thursday. The decision to call off the sale was reached together with the banks that were managing the IPO, the company said.

Telefonica and its advisers had been scrambling to rescue the deal, weighing lowering the price range or reducing the size of the deal amid insufficient demand for the stock, people familiar have said.

Investors balked at paying the asking price of 12 euros to 15 euros a share and the company and its banks were unable to find a solution. A canceled sale leaves Telefonica, Spain’s most indebted non-financial company, with shrinking options to reduce its 52.6 billion euro ($59 billion) debt pile and sustain its credit rating while still maintaining dividends.

While Telefonica had sought a valuation of as much as 3.75 billion euros for Telxius in a sale of as much as 40 percent of the unit, shareholders struggled to value the company’s submarine-cable assets and pressed for a lower price from such a motivated seller, people familiar with the matter have said.

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