AT&T Inc. (NYSE: T) says it will offer $95.63 per share for the acquisition, a premium of 162% over Straight Path Communications Inc. 's close of $36.48 on Friday. The all-stock merger should close within 12 months, subject to Federal Communications Commission (FCC) review.
In January, the FCC told Straight Path that it had to pay a $15 million fine and had a year to sell off its holdings of 39GHz and 28GHz spectrum after accusing the company of "spectrum squatting." Under Monday's deal -- valued at $1.6 billion in total -- AT&T will cover Straight Path's liabilities and remittances to the FCC.
Straight Path CEO Davidi Jonas said publicly in January that Straight Path still holds 95% of the 39GHz licenses commercially available. This translates to 620MHz of the spectrum across the top 30 markets in the US, with 175 million PoPs across the country.
The CEO has also said that Straight Path's 28GHz licenses cover major cities like New York City.
After AT&T bought mobile backhaul provider Fiber Tower in February for an undisclosed sum, Light Reading suggested that Straight Path could become another 5G spectrum target for it or other operators. (See AT&T Buys FiberTower for 5G Spectrum.)
The Straight Path buyout will give AT&T much more potential 39GHz coverage than 28GHz availability, whereas rival operator Verizon Communications Inc. (NYSE: VZ) has bulked up on 28GHz through its XO acquisition in February 2016. (See Verizon Bags XO for $1.8B.)
Most of the discussion around high-band 5G prospects in the US has so far been focused on 28GHz usage. AT&T, however, began 39GHz testing for DirecTV video streaming over a fixed "5G" connection in Austin, Texas in February. (See AT&T Lab Tests DirecTV Now Over 5G.)
So the signs are that AT&T could look to 39GHz, at least initially, for fixed 5G in the US. In addition to the spectrum acquisitions, the FCC is planning to open up nearly 11GHz of licensed spectrum in the 28GHz, 37GHz and 39GHz bands for 5G usage at an -- as yet -- undetermined point in the future. (See Ready, Set, Go! FCC Votes for First 5G Spectrum.)
AT&T and Verizon have both said that they expect to start providing 5G services in the US in 2018. (See AT&T Expects Mobile 5G Services in 'Late 2018'.)
— Dan Jones, Mobile Editor, Light Reading