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 That superseded an early, unsolicited offer on May 1 from the somewhat cloaked rival bidder of $135.96 per share, Straight Path said.
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.
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.
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.