Update: May 11, 2017 -Straight Path Communications Inc. announced this morning that it will sign today a definitive merger agreement under which Verizon Communications Inc. will acquire Straight Path for $184.00 per share, reflecting an enterprise value of approximately $3.1 billion, in an all-stock transaction. Concurrently therewith, Verizon will pay on behalf of Straight Path a termination fee of $38 million to AT&T. The transaction has been approved by the boards of directors of both Straight Path and Verizon.
Straight Path also announced that it will terminate the previously announced definitive agreement and plan of merger with AT&T Inc. and Switchback Merger Sub Inc., dated as of April 9, 2017
As previously announced, the Straight Path board of directors determined, in good faith, after consultation with its financial advisors and outside legal advisors, that the transaction with Verizon constituted a Superior Proposal under the AT&T Merger Agreement. 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.
Update: May 9, 2017 – Straight Path said yesterday it has received another sweetened offer from an unnamed suitor that values the spectrum-rich company at $3.1 billion, again labeling a competing bid “superior” to AT&T’s April 25 first offer as a bidding war heats up.
All media is relying upon one source identified by Reuters stating that Verizon is behind the bidding tug of war.
Under the AT&T agreement, Straight Path is required to pay a $38 million termination fee to AT&T if the Straight Path Board terminates the AT&T Merger Agreement.
AT&T has been given until May 10 to top the current offer.
Update: May 3, 2017 – The bidding war got a little hotter today when Straight Path announced that its mystery bidder has submitted a revised purchase offer amounting to $2.3 billion, upping it’s previous per share price of $104.64 to $135. AT&T’s original bid was $95.63 per share.
April 25, 2017 – Straight Path Communications Inc. announced today that its Board of Directors has determined that an unsolicited offer from a “multi-national telecommunications company” to acquire 100% of the issued and outstanding shares of Straight Path for $104.64 per share, a higher bid than Straight Path’s previously announced definitive agreement and plan of merger with AT&T Inc.
Under the terms of the AT&T agreement, AT&T said it would acquire Straight Path in an all-stock transaction in which Straight Path stockholders would receive $95.63 per share, $0.2 billion higher than the bid that is reportedly from Verizon, according to two financial journals.
However, headquartered in Basking Ridge, N.J., Verizon is not considered a multi-national telecommunications company and may not be the company offering the higher bid.
In a statement, Straight Path said it has notified AT&T alerting them that they have the option for the next five business days to negotiate a possible amendment of that agreement to match or exceed the current unnamed bidder’s offer.
Under the AT&T Merger Agreement, Straight Path is required to pay a $38 million termination fee to AT&T if the Straight Path Board terminates the AT&T Merger Agreement.
However, the new bidder has agreed to pay the termination fee to AT&T on Straight Path’s behalf.
Straight Path holds a nationwide portfolio of millimeter wave (mmWave) spectrum, including 39 GHz and 28 GHz licenses. The earlier announced acquisition of Straight Path by AT&T complements AT&T’s January acquisition of FiberTower and augments the company’s holdings of mmWave spectrum.
In January, the Federal Communications Commission’s Enforcement Bureau announced a settlement valued in excess of $100 million with Straight Path to resolve an investigation of Straight Path’s failure to deploy wireless services as required under its FCC spectrum licenses.