Another Buyer Steps Up for Straight Path

AT&T’s bid to acquire Straight Path Communications has some competition.  Straight Path announced this morning that an unsolicited offer from an unnamed ‘Multi-National Telecommunications Company’ has been made and that it constitutes a “superior proposal”.

Several weeks ago, AT&T agreed to buy Straight Path for $95.63 per share in AT&T stock, valuing the deal at $1.6B.  The new proposal raises the bar to $104.64 per share, which would also be paid for in stock and ratchets up the total price tag to $1.8B.  AT&T has 5 days in which to match or exceed the new bid, with a $38M termination fee as compensation should they decide not to do so.

Straight Path owns a wide swath of spectrum in the 28Ghz and 39Ghz bands, known as LMDS or millimeter wave.  Once maligned and little used, those spectrum ranges are expected to have uses in the rollout of 5G wireless services over the next 5-10 years.  After settling a dispute with the FCC early this year, Straight Path has been the focus of a fair amount of M&A speculation before AT&T stepped in with its deal.

Verizon has been rumored to be considering a bid to top that of AT&T, and is probably the most likely candidate for the unnamed multinational  telecommunications company.  But there are others.  T-Mobile or Sprint could be looking to boost their own spectrum holdings in these ranges, and then there’s Dish which is of course still sitting on a pile of other spectrum.

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Categories: Mergers and Acquisitions · Spectrum · Wireless