Verizon ups 5G bidding war for Straight Path with $1.6bn offer
Verizon is understood to be the "unnamed telco" that has offered almost double AT&T's $1.6bn bid for wireless spectrum holder Straight Path
Straight Path, which specialises in millimetre wave (mmW) communications, had already received a bid of $1.6 billion from AT&T, but according to US report, Verizon has almost doubled the amount on offer.
Straight Path was spun out of IDT in 2013 and holds a large amount of 28GHz and 39GHz spectrum, which has been earmarked as key bands for use in 5G technology, set to launch in 2020.
Straight Path didn’t disclose the name of the second bidder, but CNBC cited a source close to the process who claimed it is Verizon. A separate report from Reuters also made the same claim, although Verizon declined to comment.
Verizon’s all-stock offer of $184 per share represents a value of around $3.1 billion, with an equity value of around $2.3 billion, according to Reuters. This significantly trumps AT&T’s offer of $95.63 per share.
The bidding war has seen Straight Path’s share price skyrocket by a third to $52.01 per share. The latest bid means AT&T has just three business days to come up with a counter offer.
Verizon’s increased bid came on the same day that its CEO Lowell McAdam told analysts that he feels no “urgency” to make a content or spectrum deal.
McAdam had previously told Bloomberg he would be open to discussions with Comcast, Disney or CBS about potential deals, but told analysts on the 8 May call he would prefer the US telco to grow organically.
He said: “The question was, ‘Well, if you got a phone call from somebody, would you talk to them?’ You know, I like to consider myself a polite and hospitable person. That doesn’t change anything that’s gone on in the past five years. If somebody calls, you have a nice chat with them.”
“But the bottom line is: We don’t feel the urgency that seems to be out there in the analyst community, the banking community, and the media.”