Last checked at 
By Pamela Barbaglia
LONDON, Sept 27 (Reuters) - Spain's Telefonica islooking to list about 30 percent of its British mobile unit O2in what would be one of the biggest initial public offerings(IPOs) on the London market this year, sources told Reuters.
Europe's biggest telecom group wants to use the relativemarket calm after the turmoil caused by June's Brexit vote tocut its stake in Britain's second-largest mobile firm and hashired UBS, Morgan Stanley and Barclays as global coordinators for an IPO which could value O2 at about10 billion pounds ($13 billion), the sources said.
An O2 spokesman referred to a Sept. 5 statement byTelefonica when it said it was considering "various strategicoptions" for O2, including an IPO and that "preparatory work"had begun.
Telefonica had no comment, while Barclays and Morgan Stanleydeclined to comment and UBS was not immediately available forcomment.
Telefonica boss Jose Maria Alvarez-Pallete has asked thebanks to speed up the preparatory work, hoping to list O2 inDecember if market conditions allow, the sources said.
They ruled out a listing in November as the deal remains inthe early stages and the U.S. presidential election on Nov. 8 isseen as a potential trigger for market turmoil.
"They are hoping to list O2 at the beginning of December,but Telefonica doesn't want to take unnecessary risks if marketconditions deteriorate," one of the sources said.
The deal may be delayed to the first quarter of 2017 in theevent of market uncertainty.
TAKEOVER BID?
Telefonica has been reviewing strategic options for O2 sincea 10.3 billion pound sale to CK Hutchison Holdings wasblocked by Europe's antitrust watchdog in May.
On Sept. 5, chairman Alvarez-Pallete said the company wasclose to taking a decision on either a partial sale or a listingwhich was to take place before early 2017.
Telefonica has decided to retain control of O2 rather thansell it all, despite its efforts to cut down its 50 billioneuros of debt, the sources said.
O2, which has more than 25 million customers, has long beenon the radar screen of private equity funds, but their ambitionswere stymied by Britain's vote to leave the EU.
A minority stake listing would still leave the door open forLiberty Global or another player to launch a takeoverbid, another source said, adding that Liberty's John Malone hasyet to decide on his next move in Britain.
European listings have recently picked up after a slowdownin capital market deals, mainly due to jitters over Brexit.
On Sept. 23 Danish card payment services company Nets finalised a $4.5 billion listing four days earlierthan planned, as demand exceeded expectations.
British fitness club chain Pure Gym
And Telefonica is also in the process of floating a minoritystake of at least 25 percent in its telecoms masts businessTelxius
