(Telecompaper) Telefonica has cancelled its planned initial public offering of infrastructure unit Telxius, citing inadequate investor demand. The company "has decided to abandon the offering because it regards the valuation of Telxius implicit in the purchase orders as inadequate," said Telefonica in a statement submitted to stock market regulator CNMV, adding that it would "continue analysing strategic alternatives in connection with the asset." A source close to the operator cited by the Financial Times said the valuation process had been affected by the "market situation" as well as by "lesser knowledge" among investors of Telxius's underwater cable businesses, adding that the company had decided not to sell assets "at a loss" because it had "sufficient options to keep its investment grade rating." Bloomberg added that investors had balked at paying the asking price of EUR 12 to EUR 15 a share, according to unnamed sources.