AXA is in advanced negotiations to acquire a 30% stake in the Telefónica and Vodafone subsidiary.

French insurance company AXA appears to be the likely winner in the bid to acquire a stake in Fiberpass, the wholesale fiber optic company created by Telefónica and Vodafone Spain.

AXA Investment Management is in advanced negotiations to take a significant minority stake in Fiberpass, a joint venture between Telefónica and Vodafone Spain to provide wholesale fiber optic broadband connectivity services, or what is known as a fiberco, the Financial Times reports.

The French group, which was recently bought by BNP Paribas and manages €879 billion in assets, is in talks to take a stake of around 30% in FiberPass , according to two people familiar with the discussions.

FiberPass , which will serve more than 3.5 million locations, is valued at approximately €1.5 billion, according to estimates by New Street Research.

The agreement will allow Telefónica to retain a majority stake, while Vodafone Spain will assume a smaller stake of around 10%, according to the sources.

Both companies announced last year their intention to seek a minority shareholder for the company. Vodafone Spain was sold last year for €5 billion by its parent company to Zegona Communications, a London-listed company. The latter announced last week that negotiations to find an external investor in FiberPass were well advanced .

The deal is likely to be announced before the end of September, according to one of the people with knowledge of the negotiations.

This would be the second major transaction carried out in Spain involving the sale of stakes in wholesale fibre companies, following the recent agreement by which GIC, the Singapore sovereign wealth fund (which manages over $800 billion in assets) has closed a deal to acquire 25% of Surf, a company very similar to Fiberpass, although larger in size - it covers over 12 million homes - and created by Masorange and Vodafone Spain .

Zegona , run by two former Virgin Media executives, Eamonn O'Hare and Robert Samuelson , specializes in the purchase, repair and sale of distressed telecoms assets.

Since acquiring Vodafone Spain, Zegona has cut 28% of the Spanish operator's workforce and eliminated costs. O'Hare, Zegona 's chairman and chief executive, received £131 million for the fifteen months to March 31, one of the largest pay packages ever awarded to a FTSE executive. The payment was due to a £129 million payout from an executive incentive scheme, following a 190% rise in Zegona's shares over the past year.