It seems like Verizon has reached an agreement and it will acquire Straight Path Communications for about $3 billion. On Thursday, the latter announced that it has agreed to sign a merger agreement with Verizon. In its turn, Verizon is going to pay a $38 million termination fee to AT&T. Both boards of directors have agreed on the transaction.
A merger deal
Rumors about an unnamed company buying Straight Path emerged on Monday when the company said that someone upped its bid for a second time to $184 per share. This meant $3.1 billion, an offer far more generous than what AT&T previously offered. Straight Path preferred to not offer any more details about the bid from the suitor, which is reportedly Verizon. It is worth noting that AT&T had until May 11 to make another, bigger offer.
Since April 10, when AT&T promised to buy Straight Path, the company has been going upwards. According to a Straight Path official statement, its board of directors has agreed the deal with Verizon after consulting with financial advisors and some outside legal advisors. The transaction with Verizon was reportedly much superior than the AT&T one. So, under those circumstances, Straight Path will no longer propose any amendments to the AT&T merger agreement.
A good business
Verizon will acquire Straight Path for $184.00 per share in its own stock. This will imply a premium of 486% to the closing price of the company’s common stock of $31.41, on January 11. Also, a 404% premium to the closing stock price of $36.48 on April 7. Both companies are reportedly planning a closing within nine months. What Verizon managed to do is indeed a good business which will help the company greatly in the future.
Verizon is an American telecommunications company. It is also the biggest United States service provider of wireless communications. The initial name of Verizon was Bell Atlantic, one of the seven Baby Bells after AT&T needed to give up the control over the Bell System. The company has its headquarters at 1095 Avenue of the Americas in Midtown Manhattan, New York City. AT&T is the second largest provider of mobile telephone services in the United States. It is also the largest provider of fixed telephone services. AT&T began its activity as Southwestern Bell Corporation.
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