Reports: Mystery Straight Path Bidder Is Verizon; Bidding War For Wireless Spectrum Holder Reaches A Fever Pitch
The "multi-national telecommunications company" in competition for Straight Path Communications with AT&T nearly doubled AT&T's original offer on Monday morning, and several media outlets, including CNBC and Reuters, have reported that the mystery bidder is Verizon.
Straight Path received a revised offer from an unnamed bidder on Monday. The latest offer is an all-stock bid of $184 per share for Straight Path, a value of about $3.1 billion. This offer tops AT&T's original bid of $1.6 billion in April.
News of the bidding war sent Straight Path's stock soaring on Monday morning to $216 per share, a boost of 33 percent and well above the new bid of $184 per share. Shares of Verizon and AT&T remained largely unchanged on Monday morning.
The secondary bidder's latest offer tops its own offer of $104.64 per share or $1.8 billion which the company submitted at the end of April in an effort to compete with AT&T for Glen Allen, Va.-based Straight Path. Reuters is reporting that "sources familiar with the matter" have confirmed that the unnamed telecom company is AT&T's Basking Ridge, N.J.-based competitor, Verizon. On Monday morning, CNBC's anchor David Faber also reported that the "mystery bidder" was Verizon.
A spokesperson for Verizon declined to comment on the Straight Path matter when reached by CRN.
Earlier in April, Dallas-based AT&T announced its intent to acquire Straight Path for $1.6 billion, or $95.63 per share. Now that Straight Path is considering the "superior proposal" from the secondary bidder, AT&T has three days to match or exceed the new offer on the table, via the terms of its AT&T merger agreement.
The two telecom companies are aggressively vying for Straight Path's valuable millimeter wave (mmWave) spectrum licenses that cover the entire United States, including within the top 40 markets. Solution provider told CRN in April that both AT&T and Verizon are hungry for more wireless spectrum as they build out their 5G plans, and that available spectrum licenses can be hard for carriers to come by.
In the meantime, Straight Path cannot enter into a new agreement with the new bidder, who has said that its offer is available until May 10. Should Straight Path accept the new bidder's offer, Straight Path is required to pay a $38 million termination fee to AT&T. The new bidder has said it will pay the termination fee to AT&T on Straight Path's behalf.