(Reuters) - Verizon Communications Inc VZ.N snapped up wireless spectrum holder Straight Path Communications Inc STRP.A in a $3.1 billion deal, roughly double rival AT&T's T.N initial offer, as Verizon seeks an advantage in the race toward a 5G network.

The $184 per share all-stock offer represents a discount of 17.8 percent to Straight Path’s close on Wednesday and an equity value of $2.3 billion. The stock had surged nearly five-fold since April 7, a day before AT&T made the first move with a $95.63 per share offer.

Straight Path is one of the largest holders of millimeter wave spectrum, which is expected to play a large role in 5G. In general, 5G is expected to boast higher speeds, shorter response times and more capacity.

The spectrum is particularly important for 5G broadband services that AT&T and Verizon hope to launch to better compete with high-speed Internet offerings from cable companies.

“Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G,” Hans Vestberg, president of global network and technology at Verizon, said in a statement.

AT&T did not immediately respond to a request for comment.

In April, AT&T said it would buy Straight Path for $1.25 billion in an all stock deal.

Straight Path said later that it received a bid from an unnamed bidder that Reuters reported was Verizon, citing sources.

The transaction “positions Verizon well ahead of peers in access to high frequency spectrum holdings suitable for 5G,” analysts at Jefferies said in a note.

But shares of Straight Path slumped 20 percent in midday trading to $178 as news of the deal dashed investor hopes of a bidding war between the two largest U.S. wireless carriers.

The frenzy around Straight Path started after an anonymous short-seller tipped off regulators in November 2015 that the company had not built communications systems as it had claimed, leading to an investigation by the U.S. Federal Communication Commission.

The company settled with the FCC and put itself on the block in January.

Verizon will pay, on behalf of Straight Path, a termination fee of $38 million to AT&T. The deal is expected to close within nine months, pending review by the FCC. As part of the earlier settlement with FCC, Straight Path will pay the U.S. government a 20 percent cut from the sale of its spectrum licenses.

Evercore was financial adviser to Straight Path and Weil, and Gotshal & Manges served as company counsel on the deal.

Debevoise & Plimpton LLP served as counsel to Verizon.