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AT&T to acquire Glen Allen-based Straight Path

12 April, 2017, 02:35 | Author: Paula Vaughn
  • AT and T

Straight Path had a big incentive to sell following a settlement earlier this year with the FCC.

A coverage map of Straight Path's spectrum has been provided below.

The acquisition isn't a total surprise - Straight Path, which was spun off of IDT Corporation (NYSE:IDT) in 2013, said back in January that it had hired Evercore Partners to explore "strategic alternatives to maximize shareholder value".

Shares of Straight Path Communications Inc (NASDAQ:STRP) traded down 0.50% during trading on Tuesday, hitting $91.18.

Straight Path shareholders will receive $1.25 billion, or $95.63 per share, paid in AT&T stock, according to an AT&T news release.

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AT&T is set to pick up 868 spectrum licenses in the 28 GHz and 39 GHz bands it plans to use for upcoming 5G services in $1.6B deal. That's totally understandable. "Straight Path is the largest commercial holder of the 39 GHz spectrum, with about 95 percent of the total licenses commercially available, as well as a significant holder of 28 GHz in major markets, including NY and San Francisco", the company's website reads. Qualcomm Inc. (QCOM) declared that it's filed its Answer and Counterclaims to the January lawsuit brought by Apple against the Company in the U.S. District Court for the Southern District of California.

The purchase gives AT&T 735 mmWave licenses in the 39GHz band and 133 licenses in the 28GHz band. Both AT&T and industry leader Verizon have been purchasing companies with millimeter wave spectrum, which will be used when 5G networks are built.

Shares of Straight Path soared to as high as $92 following the announcement, their highest price ever.

Stocks of AT&T Inc. The transaction needs clearance from the FCC.

AT&T agreed to buy Straight Path for $1.6 billion, which includes debt and an amount owed to the Federal Communication Commission. Mark Wigfield, an agency spokesman, declined to comment.

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