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(Bloomberg) -- Telefonica SA and Zegona Communications Plc’s Spanish unit are set to receive non-binding offers for a stake in their fiber broadband unit, the first major deal process since the government replaced Telefonica’s executive chairman, according to people familiar with the matter.
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Bids are expected as soon as today, with AXA SA, private equity firm Vauban Infrastructure Partners and billionaire Amancio Ortega’s family office Pontegadea Inversiones SL having expressed interest in acquiring the minority stake, according to people familiar with the matter. Telefonica and Zegona are seeking to sell a 40% stake for about €800 million ($832 million), according to the people.
The asset has also attracted pension fund Caisse de Depot et Placement du Quebec and Singapore’s sovereign wealth fund GIC Pte., the people said, asking not to be named discussing private matters.
The offers are expected just as Marc Murtra on Wednesday is set to lead his first regular board meeting since being named Telefonica chairman and chief executive officer. The Spanish government used its 10% stake in the telecommunications company to demand that his predecessor Jose Maria Alvarez-Pallete step down.
Pallete had regularly used stake sales and the creation of joint ventures for infrastructure units as a way to raise funds to pay down debt, while also reducing investment needs.
Spokespeople for Vauban, CDPQ, Pontegadea, GIC, Telefonica and Zegona’s Vodafone Spain unit declined to comment. Spokespeople for Axa didn’t respond to requests for comment.
Some of the potential bidders already have a presence in Spain’s fiber optics market. Along with Swiss Life Asset Managers and Morrison, AXA owns part of wholesale carrier Lyntia Networks.
Vauban has a stake in Telefonica’s rural fiber unit Bluevia, while CDPQ is a partner of Telefonica in Brazil, where they jointly own a company that deploys and operates fiber networks across medium-sized cities. Pontegadea is a partner of Telefonica in Telxius, an infrastructure group that operates fiber-optic subsea cables.
Telefonica and Zegona announced in November that their joint venture, known as FiberCo, will cover approximately 3.6 million homes and have about 1.4 million customers. In total, Telefonica’s fiber networks currently reach more than 30 million homes in Spain.