Straight Path bidding war nearly doubled the purchase price
Verizon Communications has officially broken up AT&T’s deal for Straight Path Communications and will walk away with the company and its millimeter wave spectrum holdings for $3.1 billion.
Straight Path announced Thursday morning that, one month after the news that it was going to be acquired by AT&T for $1.6 billion ($1.25 billion in stock and assumption of Straight Path’s liabilities), it will be pulling out of the AT&T transaction and will be purchased by Verizon instead, confirming that Verizon was the mystery third-party bidder that turned AT&T’s deal into a bidding war.
“AT&T informed Straight Path that after much deliberation, it has determined not to make any new bids or proposals to Straight Path or to propose any amendments to the AT&T merger agreement,” Straight Path said in a company statement.
Straight Path’s arrangement with AT&T included a condition that Straight Path could consider competing offers. If one proved to be superior, AT&T would have AT&T five business days to match or exceed the new offering or else Straight Path could terminate the AT&T deal.
According to Straight Path’s public statements, Verizon initially bested AT&T’s $1.6 billion price with a $1.8 billion offer, then upped the figure to $2.3 billion on May 3rd and most recently sweetened it to the final selling price of $3.1 billion. Those offers almost doubled Straight Path’s price: while AT&T offered nearly $96 a share for Straight Path; Verizon will pay $184 per share.
Verizon will pay a $38 million termination fee to AT&T under the terms of the deal. The Verizon transaction has already been approved by its board and that of Straight Path and is expected to close within nine months pending Federal Communications Commission review.
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.
Image cpyright: kentoh / 123RF Stock Photo
