Verizon (VZ) - Get Report has outbid rival AT&T (T) - Get Report in the $3 billion race to acquire Straight Path Communications (STRP)

Straight Path shares plunged in morning trading Thursday, down more than 20% to $178.25. Shares closed at $223.79 on Wednesday.

The wireless spectrum holder on Thursday said it would sign a definitive merger agreement with Verizon to acquire all Straight Path shares for $184 each in an all-stock transaction, giving the company an enterprise value of $3.1 billion. Verizon will pay on behalf of Straight Path a termination fee of $38 million to AT&T. The transaction has been approved by the boards of directors of both Straight Path and Verizon.

Straight Path said Monday that an unnamed suitor had upped its bid for the second time to $184 per share, or $3.1 billion, an approach it deemed superior to a prior agreement with AT&T.

AT&T has until today to respond to the bid from the unnamed multi-national suitor, which is reportedly Verizon. Straight Path did not disclose details about the intervening bids between AT&T and the rival that have pushed the sale price higher.

Straight Path has been rocketing since AT&T said it would buy the company for $95.63 per share, valuing the total company at $1.6 billion, on April 10. The company's close prior to the original AT&T deal was $36.48, meaning the stock has more than quintupled since bidding commenced.

"The Straight Path board of directors 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. AT&T informed Straight Path that after much deliberation, it has determined not to make any new bids or proposals to Straight Path or to propose any amendments to the AT&T Merger Agreement," the company said today.

The acquisition of Straight Path for $184.00 per share in Verizon stock, implies a premium of 486% to the closing price of Straight Path common stock of $31.41 on January 11, 2017, the day before Straight Path announced its FCC settlement and strategic alternatives process, and 404% premium to the closing stock price of $36.48 on April 7, 2017, the business day prior to entry into the AT&T Merger Agreement.

The companies anticipate a closing within nine months, subject to FCC review.

Shares of AT&T and Verizon were both down slightly on Thursday.

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