Straight Path’s going price is at $184 a share, up from AT&T’s original offer of less than $96 a share
The battle over Straight Path and its extensive millimeter wave spectrum holdings continues, with a new top offer that puts the company’s value at about $3.1 billion with a purchase price of $184 per share, according to Straight Path.
Reuters reported that Verizon is the current top bidder, citing an anonymous source, and also calculated that the equity value of the offer is about $2.3 billion. According to Straight Path’s public statements, it appears that the initial third-party offer of $1.8 billion was upped to $2.3 billion on May 3rd and most recently revised to $3.1 billion.
Straight Path holds the rights to 868 spectrum licenses in the 28 GHz and 39 GHz spectrum bands covering most of the United States, including spectrum in the country’s 40 largest markets. AT&T planned to buy the company to boost its holdings in millimeter wave frequencies for future “5G” networks and was originally set to pay a purchase price of $1.6 billion, including $1.25 billion in stock and the assumption of the company’s liabilities. However, the deal included a caveat that if Straight Path received a “superior offer,” then it could back out of the AT&T deal.
Straight Path then received an offer for a $1.8 billion purchase price, in the form of an unsolicited bid from an unnamed “multi-national telecommunications company” which was reported to be Verizon, and the third-party bid has been ratcheted up twice since first being proffered. AT&T had five business days to revise its offer, and in light of the new top offer, AT&T again has the five-day window to respond.
If the deal with AT&T falls through, Straight Path would have to pay AT&T a termination fee of up to $38 million — which Straight Path says the new bidder has offered to pay to AT&T if Straight Path agrees to the third-party offer. At the same time, the terms of the deal also call for AT&T to make an $85 million payment to Straight Path should the current agreement remain in place but not close by July 9, 2018.
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