AT&T Buys Straight Path
Communications for $1.25B
April 10, 2017
Path Communications and AT&T have signed a definitive merger agreement
under which AT&T is to acquire Straight Path for $95.63 per share in an
all-stock merger intended to qualify as a tax-free reorganization.
Straight Path is one of the largest holders of 28 GHz and 39 GHz
millimeter wave spectrum. The transaction, which was approved by the
Board of Directors of both companies, brings Straight Path’s previously
announced strategic alternatives process to a conclusion and maximizes
Straight Path shareholder value. The transaction has a total value of
$1.6 billion which includes liabilities and amounts to be remitted to
the FCC per the terms of Straight Path’s January 2017 consent decree.
Straight Path shareholders will receive $1.25 billion, or $95.63 per
share, which will be paid using AT&T stock.
Key strategic benefits of the transaction:
The acquisition of Straight Path for $95.63 per share in AT&T stock,
implies a premium of 204% to the closing price of STRP common stock of
$31.41 on January 11, 2017, the day before Straight Path announced its
FCC settlement and strategic alternatives process, and 162% premium to
the closing stock price of $36.48 on April 7, 2017. Stock consideration
received by Straight Path shareholders will be based on a variable
number of AT&T common stock issued at transaction close to ensure fixed
consideration of $95.63 per share. The companies anticipate a closing
within 12 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 AT&T and agreed to vote his Class A shares (held
through a trust) in support of the transaction, subject to certain
served as exclusive financial advisor to Straight Path and Weil, Gotshal
& Manges LLP served as company counsel on this transaction.
Straight Path Communications CEO Davidi Jonas commented: “The merger of
AT&T and Straight Path Communications marks a vital point for us.
Importantly, this merger provides Straight Path shareholders with a
compelling return since Straight Path’s spin-off to become an
independent public company in 2013, with an initial price per share of
$6.40 on July 31, 2013.”
Straight Path holds an extensive portfolio of 39 GHz and 28 GHz wireless
spectrum licenses. Straight Path is developing next generation wireless
technology through its Straight Path Ventures subsidiary. Straight Path
holds licenses and conducts other business related to certain patents
through its Straight Path IP Group subsidiary.