Straight Path spectrum battle erupts as mystery bidder usurps AT&T deal

Mobile telecoms specialist Straight Path Communications has received a rival takeover offer from an undisclosed "multi-national telecommunications company", which looks to usurp its recently agreed deal with AT&T.

Telecoms spectrum owner Straight Path, which last month agreed to a $95.63-a-share buyout by AT&T Inc, said the new offer was at $184 per share that values the company at $3.1bn.

It said the offer, will be paid in stock by the unnamed company, constitutes a "superior proposal" to the agreed $1.6bn merger with AT&T, which is the second largest wireless operator in the US.

But for the next three days AT&T has the option to match or exceed the new bid, but will receive a $38m termination fee if Straight Path ends its agreement.

Straight Path, which owns substantial wireless spectrum bandwidth licenses that are in demand by mobile network operators and internet service providers to form part of a new 5G network, said the new bidder had previously made an offer to buy the company at $135.96 per share.

As yet, Straight Path noted that it remained subject to the AT&T agreement and has not changed its recommendation in support of the AT&T transaction, as there can be no assurances that a firm transaction with the new bidder will result from the offer.

Last month Verizon Communications, the US number-one operator, was reported to be considering trumping AT&T's initial offer, with Straight Path confirming an unnamed third party was evaluating making an offer but Verizon declining to comment on what it said was just speculation.

Last month analysts at Jefferies said the Straight Path acquisition "positions AT&T ahead of peers in the path to 5G", complementing the portfolio of assets acquired from its recent FiberTower deal. "While initial 5G standards are unlikely until 2018, with a full set expected in 2020, the acquisition allows AT&T to accelerate the timeline for experimentation and engineering."

Verizon is expected to commercially launch a 5G service next year, while AT&T has also been carrying out 5G trials ahead of its own launch.