Straight Path receives "superior" offer to AT&T's buyout bid

Cornelia Mascio
Aprile 25, 2017

Another bidder has stepped in with an offer for Henrico County-based Straight Path Communications Inc., topping a $1.6 billion buyout deal the company reached with telecommunications giant AT&T Inc. earlier this month. According to Reuters' report, though, that anonymous bidder - referenced by Straight Path only as a "multi-national telecommunications company" - is Verizon.

AT&T has an option for the next five business days to negotiate a better agreement that meets or exceeds the new bidder's offer.

If Straight Path goes with the new bid it will be required to pay a termination fee of United States dollars 38 million to AT&T, and the company said the new bidder agreed to settle this amount as well.

Straight Path's shares were up 6.4 percent at $118 in pre-market trading, much above the offer price, indicating that investors are expecting a bidding war. The company is not permitted to enter into the Bidder's merger agreement or 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".

A spokesman for AT&T said the company had been informed of the new offer.

Telecom companies are conducting trials for 5G, the fifth generation of wireless technology that is expected to be significantly faster than current networks.

Straight Path owns high-frequency airwaves in the 28 GHz and 39 GHz millimeter wave band that would boost AT&T's plans to provide 5G wireless services.

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