Stocks/Earnings

Straight Path Board Says Rival Bid Is Superior to AT&T’s

Straight Path stock soaring on higher bid, believed to be from Verizon 5/08/2017 11:56 AM Eastern

Straight Path shares rose more than 32% in mid-day trading Monday after the holder of valuable spectrum said its board has determined that a rival bid from a “multi-national telecommunications company,” speculated to be Verizon Communications, is superior to the one it had in hand from AT&T.

 The rival bid is for 100% of issued and outstanding shares of Straight Path for $184 per share, an all-stock deal that carries enterprise value of about $3.1 billion.  That superseded an early, unsolicited offer on May 1 from the somewhat cloaked rival bidder of $135.96 per share, Straight Path said.

RELATED: Straight Path Gets Bigger Bid from ‘Multi-National’ Telecom

AT&T’s original offer is for $95.63 per share, reflecting an enterprise value of $1.6 billion, to be paid using AT&T stock.

RELATED: AT&T Eyes More 5G Spectrum with Straight Path Buy

Straight Path and its 39 GHz and 28 GHz millimeter wave spectrum is increasing in value because it provides coveted capacity for 5G networks that could deliver gigabit-class broadband services to homes over fixed wireless systems and play a role in more advanced applications such as self-driving cars.

RELATED: A Beginner's Guide to '5G'

Straight Path said AT&T has the option for the next three business days to put in a revised offer that matches or exceeds the higher unsolicited bid, which will remain outstanding until 11:59 p.m. ET on May 10.

Straight Path faces a break-up fee of $38 million if the AT&T agreement is scuttled.

Shares in Straight Path were up $52.87 (32.74%) to $214.36 each Monday in mid-day trading.

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