Verizon has officially announced the deal, less than a day after reports surfaced.
Verizon Communications (VZ) will acquire Straight Path Communications (STRP) for $184 a share, with an enterprise value of $3.1 billion, the companies announced Thursday morning.
Verizon, a Dow Jones industrial average component, trumped AT&T (T) for the holder of key wireless spectrum for next-generation networks. The deal confirmed a late Wednesday report in the Wall Street Journal.
In early April, AT&T agreed to buy Straight Path, which holds licenses for fifth-generation wireless service, for $1.6 billion. But Verizon jumped in, and ultimately offered nearly twice the price AT&T was willing to pay. Verizon will pay a $38 million termination fee on behalf of Straight Path to AT&T.
Straight Path shares plunged 20.5% to 177.93 in morning trading on the stock market today. Investors had pushed up the stock beyond any offers, hoping the bidding frenzy would continue, closing at 223.79 on Wednesday.
Shares got as high as 235.88 on Tuesday, which was more than six times the 36.48 Straight Path was worth on April 7, before AT&T’s initial offer.
Verizon shares edged down 0.3% to 46.04, close to a 15-month low it hit last week. AT&T fell 2 cents to 38.31, close to its worst levels since late November.