Straight Path Communications shares soared more than 20% Thursday morning after the company announced it had struck an agreement to be acquired by Verizon Communications for $184 per share, an all-stock deal that represents an enterprise value of about $3.1 billion.
The definitive agreement, announced Thursday, means that Verizon was successful in outbidding AT&T for Straight Path, a company with 39 GHz and 28 GHz millimeter wave spectrum that has increased in value as it becomes prime real estate for new 5G services.
Under the new deal, Verizon will pay on behalf of Straight Path a break-up fee of $38 million to AT&T. The boards of Verizon and Straight Path have signed off on the deal. AT&T originally put in a bid of $95.63 per share, or an enterprise value of $1.6 billion.