Verizon Buys Straight Path for $3.1B
May 11, 2017
Path Communications will sign today a definitive merger agreement under
which Verizon Communications will acquire Straight Path for $184.00 per
share (reflecting an enterprise value of approximately $3.1 billion) in
an all-stock transaction that is intended to qualify as a tax-free
Concurrently therewith, Verizon will
pay on behalf of Straight Path a termination fee of $38 million to AT&T.
The transaction has been approved by
the boards of directors of both Straight Path and Verizon.
Straight Path also announced that it will terminate the previously
announced definitive agreement and plan of merger with AT&T and
Switchback Merger Sub Inc., dated as of April 9, 2017 (the "AT&T Merger
Agreement"). As previously announced, the Straight Path board of
directors determined, in good faith, after consultation with its
financial advisors and outside legal advisors, that the transaction with
Verizon constituted a Superior Proposal under the AT&T Merger Agreement.
AT&T informed Straight Path that after much deliberation, it has
determined not to make any new bids or proposals to Straight Path or to
propose any amendments to the AT&T Merger Agreement.
acquisition of Straight Path for $184.00 per share in Verizon stock,
implies a premium of 486% to the closing price of Straight Path common
stock of $31.41 on January 11, 2017, the day before Straight Path
announced its FCC settlement and strategic alternatives process, and
404% premium to the closing stock price of $36.48 on April 7, 2017, the
business day prior to entry into the AT&T Merger Agreement. Stock
consideration received by Straight Path stockholders will be based on a
variable number of Verizon common stock issued at transaction close to
ensure fixed consideration of $184.00 per share. The companies
anticipate a closing within nine months, subject to FCC review. The
transaction is supported by Straight Path's majority shareholder, Howard
Jonas, who has entered into a voting agreement with Verizon and agreed
to vote his Class A shares (held through a trust) in support of the
transaction, subject to certain limitations.
Evercore served as exclusive financial advisor to Straight Path and
Weil, Gotshal & Manges LLP served as company counsel on this
transaction. Debevoise & Plimpton LLP served as counsel to Verizon on