One of the fastest internet providers in the US, AT&T, had earlier announced their plans to buy Straight Path Communications (SPC) in a proposed $1.6 billion deal. However, reports from several reliable sources indicate that AT&T has recently decided to pull out of the deal after SPC accepted the $3.1 billion counteroffer by Verizon.
AT&T had earlier signed a similar agreement in the month of January for acquiring the spectrum assets of FiberTower. The proposed purchase of SPC by AT&T was to bolster the long-term ambition of the telecom giant, which was to offer 5G network services to their customers with the help of highly coveted millimeter wave channels in spectrum bands above the frequency of 24 GHZ.
FiberTower offers backhaul service to wireless carriers in the country through their stable of millimeter wave licenses in the frequency range of 24 MHz and 39 GHz bands. The millimeter wave spectrum assets of SPC represent approximately 95% of the commercially available 39 GHz spectrum capacity in the entire nation.
The agreement between AT&T and SPC contained a provision, which allowed the telecom company to pull out of the deal if SPC received a “superior offer.” Just a few days after the announcement of AT&T-SPC deal, the officials from Straight Path Communications admitted that a “multi-national telecommunications company” has submitted a counteroffer, but they refused to reveal the name of the bidder.
AT&T went on to revise their previous offer within a five-day window, but the third-party bidder once again responded with an improved offer, which initially raised the proposed price to $2.3 billion and then finally to $3.1 billion.
The officials from SPC recently issued an official statement, in which they confirmed that the third party bidder was Verizon. The press release from the company also added that their board of directors had “determined, in good faith, after consultation with its financial advisors and outside legal advisors, that the transaction with Verizon constituted a superior proposal under the AT&T merger agreement.”
The telecom giant, AT&T then notified SPC that they have decided “not to make any new bids or proposals or to propose any amendments to the AT&T merger agreement.” AT&T has been trying to lure in more customers to their internet service by offering a few attractive packages to their customers, and the proposed deal was an initiative to offer the best internet deal all around the country.