Verizon walks Straight Path to bidding war with AT&T
April 26, 2017
Straight Path Communications (NYSEMKT: STRP) has received an unsolicited bid of $104.64 per share, or about $1.8 billion, in an all-stock takeover offer from a “multi-national telecommunications company.” That unnamed company? Verizon (NYSE: VZ), according to Reuters, which has also reportedly offered to cover the $38 million termination fee owed to AT&T (NYSE: T) if Straight Path wanders away from an agreement made earlier this month.
Straight Path has already traveled a circuitous route to this point. The company owns a portfolio of 28GHz and 39GHz millimeter wave spectrum licenses, assets the company was ordered to sell after reaching a settlement with the FCC in January related to allegedly using falsified data to renew certain licenses. That’s where AT&T stepped in with its bid of $95.63 per share, or about $1.6 billion.
Why would Verizon go to the mat with AT&T over wireless spectrum licenses? The licenses held by Straight Path are an essential component for building a 5G network capable of handling increased download speeds. They're designed for use by internet-enabled devices or products—like self-driving cars—that require a consistent signal but typically operate beyond the reach of Wi-Fi.