Straight Path Communications has announced a definitive merger agreement under which Verizon Communications will acquire Straight Path for $184.00 per share, equating to an enterprise value of approximately $3.1 billion, in an all-stock transaction.
Straight Path holds an extensive portfolio of 39 GHz and 28 GHz wireless spectrum licenses, specifically 868 FCC spectrum licenses providing wireless coverage across the U.S. The company also develops next generation wireless technology through its Straight Path Ventures subsidiary, and holds licenses and conducts business related to certain patents via its Straight Path IP Group subsidiary.
Concurrent with the agreement, Verizon will pay on behalf of Straight Path a termination fee of $38 million to AT&T, which on April 10th announced an agreement to acquire Straight Path for $95.63 per share, representing a total value of $1.6 billion. The sum implied a premium of 204% to the closing price of Straight Path's stock of $31.41 on January 11th and a 162% premium to the $36.48 price on April 7th.
As part of the agreement with Verizon, Straight Path announced that it is terminating the previously announced definitive agreement to merge with AT&T and Switchback Merger Sub. As previously announced, the Straight Path board determined after consultations with financial and legal advisors that the transaction with Verizon constituted a superior proposal. AT&T opted not to make any new bids or proposals to Straight Path or to propose amendments to the original agreement.
The acquisition of Straight Path for $184.00 per share in Verizon stock implies a premium of 486% to the closing price of Straight Path common stock of $31.41 on January 11, 2017, the day prior to Straight Path announcing its FCC settlement and strategic alternatives process, and a 404% premium to the closing stock price of $36.48 on April 7th, the business day prior to announcement of the AT&T merger agreement.
The proposed transaction has been approved by the boards of directors of Straight Path and Verizon, and the companies currently anticipate closing within nine months, subject to FCC review. The transaction is supported by Straight Path's majority shareholder, Howard Jonas, who has entered into a voting agreement with Verizon and agreed to vote his Class A shares in support of the transaction.
Regarding the acquisition, Hans Vestberg, EVP and president of global network and technology at Verizon, said, "Verizon now has all of the pieces in place to accelerate the deployment of 5G… combined with the recent transactions with Corning, XO Communications and Prysmian Group, this is another step to build the next-generation network for its customers".
AT&T Buys 39 GHz and 28 GHz Licenses for $1.6 Billion
AT&T agreed to acquire Straight Path Communications, which holds a nationwide portfolio of millimeter wave (mmWave) spectrum, including 39 GHz and 28 GHz licenses. Specifically, AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets. The deal was valued at $1.6 billion, which includes liabilities an
