AT&T to buy 5G wireless spectrum holder Straight Path for $1.25 bn in stock

US wireless carrier AT&T Inc yesterday struck a deal to buy 5G wireless spectrum holder Straight Path Communications Inc, for $1.25 billion in stock.

Under the terms of the deal, AT&T will pay $95.63 per share, a premium of 162.1 per cent to Straight Path's Friday closing price.

Straight Path shareholders will receive $1.25 billion, which will be paid using AT&T stock.

The tax-free deal, valued at a total $1.6 billion, includes liabilities and $15 million to be paid to the US Federal Communications Commission (FCC).

Straight Path in January agreed to pay to the FCC $15 million to settle claims that it had submitted false data to renew airwave licenses.

The transaction is being backed by Straight Path's majority shareholder, Howard Jonas, who has entered into a voting agreement with AT&T in support of the deal.

Straight Path had in January announced that it has hired investment bank Evercore Partners to help explore strategic alternatives, including a sale.

AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band used in mobile communications, which cover the entire US, including all of the top 40 markets.

AT&T said that the proposed acquisition complements its January purchase of FiberTower and augments its holdings of mmWave spectrum.

''The acquisition will support AT&T's leadership in 5G, which will accelerate the delivery of new experiences for consumers and businesses like virtual and augmented reality, telemedicine, autonomous cars, smart cities and more,'' AT&T said in a statement.

The transaction is subject to regulatory review, and expected to close within 12 months.