On Thursday, Verizon Communications, Inc. (NYSE: VZ) announced to buy Straight Path Communications Inc. (NYSE: STRP), the wireless spectrum holder, for an enterprise value of around $3.1 billion.
Straight Path Communications earlier agreed to be bought by AT&T, however, on Monday, Reuters reported an unnamed telecommunications company had raised its offer to acquire Straight Path, and the unnamed company was Verizon. On Thursday, Straight Path said that Verizon will pay, on behalf of Straight Path, the termination fee of $38 million to AT&T.
The deal was an all-stock offer, and it represents a discount of 17.8% to the closing price of Straight Path on Wednesday and $2.3 billion equity value. Last month, AT&T made an offer of $95.63 per share, or $1.25 billion, which was below Verizon’s offer. AT&T did not immediately respond to a request for comment.
After the acquisition, Verizon will get help from Straight Path, which holds a large trove of 28 GHz and 39 GHz millimeter wave spectrum used in mobile communications, in developing 5G network.
“Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G,” said Hans Vestberg, the president of global network and technology at Verizon.