Verizon outbids AT&T for 5G wireless spectrum holder Straight Path Communications

Straight Path Communications Inc, holder of precious 5G wireless spectrum, today said that it has received a superior buyout offer from a "multi-national telecommunications company," topping a rival bid from AT&T Inc.

Straight Path did not name the bidder, but Reuters identified Verizon Communications as the mystery suitor.

Straight Path said that the superior offer it received was $95.63 per share in stock reflecting an enterprise value of $1.8 billion, and the offer is valid until 3 May.

This month, US wireless carrier AT&T struck a deal to buy Straight Path for $1.25 billion in stock. (See: AT&T to buy 5G wireless spectrum holder Straight Path for $1.25 bn in stock)

AT&T had offered to pay $95.63 per share, a premium of 162.1 per cent to Straight Path's 10 April closing price.

The tax-free deal, valued at a total $1.6 billion, includes liabilities and $15 million to be paid to the US Federal Communications Commission (FCC).

The deal also includes Straight Path paying AT&T $38 million termination fee if it terminates the agreement in favour of a better offer.

The transaction has the backing of Straight Path's majority shareholder, Howard Jonas, who has entered into a voting agreement with AT&T in support of the deal.

''Straight Path has notified AT&T of the Straight Path Board's determination and, pursuant to the AT&T Merger Agreement, AT&T has the option for the next five (5) business days (the "Negotiation Period") to negotiate a possible amendment of that agreement to match or exceed the Bidder's offer,'' Straight Path said in a statement.

''Straight Path is required, and intends to, negotiate in good faith with AT&T during the Negotiation Period. Straight Path is not permitted to enter into the Bidder's merger agreement or to change its recommendation in favor of the AT&T transaction unless, at the end of the Negotiation Period, the Straight Path Board determines that the Bidder's offer continues to constitute a "Superior Proposal" and satisfies certain other requirements under the AT&T Merger Agreement,'' the statement added.

Straight Path, based in Virginia, holds 735 mm Wave licenses in the 39 GHz band and 133 licenses in the 28 GHz band used in mobile communications, which cover the entire US, including all of the top 40 markets.

This spectrum will help the suitors to accelerate their rolling out of 5G technology to consumers and businesses like virtual and augmented reality, telemedicine, autonomous cars, and smart cities.