If there is not more to this then $207M, Solus is the biggest bunch of buffoons.
*The initial license count was approximately 738.
*They had clear possession of 88 licenses heading into the transaction (Not sure of how many of the 88 were forfeited)
*650 licenses remained in question.
*They forfeited in total approximately 224 licenses.
*That left two lots of licenses that they possessed, The initial 88 plus what they netted out with the FCC equaling 426 licenses. Walked away with 514 licenses. That’s about 70% of the original lot.
*The total mhz pops on that initial 738 was around 151 Billion. Based on 514 licenses mhz pops now 106 Billion.(Rough Math)
*If the $207M figure is final then AT&T got the spectrum for $.00196 per mhz pop. The Verizon and Straighpath Deal yields a mhz pop value of $.0172. That is nearly 9X that of the Fibertower valuation.
“One of the most interesting findings from the Verizon/Straight Path S-4 filing was that 11/20 potential bidders contacted by Straight Path’s bankers expressed some level of interest, executing confidentiality agreements,” Niknam wrote. “These may have included non-strategic players (i.e.: financial sponsors), and Verizon/AT&T ultimately did drive the lion’s share of the bidding; however, we still think it is a point worth flagging. Specifically, we are increasingly hearing industry participants discuss the potential for non-wireless incumbents (i.e.: cable, larger tech companies) evaluating a greater presence in the U.S. wireless market.” Indeed, Straight Path had long been expected to sell its licenses to a wireless or cable network operator. The company holds an average of 620 MHz in the top 30 U.S. markets and covers the entire nation with 39 GHz spectrum; it also holds 28 GHz spectrum licenses
During the month of February 2017, at the direction of the Straight Path board, representatives of Evercore contacted 20 potential bidders, and 11 of the 20 potential bidders executed confidentiality agreements with Straight Path. Those bidders were Verizon, AT&T, Bidder B, Bidder C and seven other strategic bidders, which we refer to as Bidders D, E, F, G, H, I and J. After executing confidentiality agreements with Straight Path, the bidders, other than Bidder D, were granted access to an online data room established by Straight Path, which we refer to as the virtual data room. Bidder D informed representatives of Evercore after executing the confidentiality agreement that such bidder was no longer interested in pursuing a potential transaction with Straight Path and was not provided access to the virtual data room.
History of STRP Bids:
03/01/2017 $435M ATT
03/02/2017 $602M ATT
03/02/2017 $550M VZ
03/02/2017 $480M Bidder B
03/13/2017 $750M VZ
03/23/2017 $800M ATT
03/30/2017 $875M ATT
03/30/2017 $801M Bidder B
03/30/2017 $776M VZ
04/06/2017 $951M ATT
04/06/2017 $1.03B VZ
04/07/2017 $960M Bidder B
04/07/2017 $1.26B VZ
04/07/2017 Bidder B can’t support $1B+
04/08/2017 $1.4B ATT
04/09/2017 $1.55B VZ
04/09/2017 $1.6B ATT
04/20/2017 $1.8B VZ
05/01/2017 $2B ATT
05/01/2017 $2.3B VZ
*05/07/2017 $3.1B VZ or $3.3B if Straight Path allowed Verizon the opportunity to discuss with AT&T for a period of five business days a transaction that would result in a sale of Straight Path after which each of Verizon and AT&T would own some of Straight Path’s licenses, which we refer to as the May 7 Verizon Enhanced Offer.
*Did not want to accept the $3.3B offer because it would end the competitive bidding process.
*AT&T was not interested in topping the $3.1B offer.
*There has to be more to this as I cannot imagine those hedge funds settling for this.
*FCC announced 28/39 was first MM Wave approved for 5G mobility in October 2015.
*If the FCC had any say in all of this why would they want to undermine the value of their future auctions.
*In all of these deals there is generally some type of breakup fee that one can pay to get out of the deal. Did Fibertower and their advisors not institute any such type of clause?
*Verizon bought up XO. There had to be some temperature taking of the rooms out there by Evercore, Solus etc… to see interest in Fibertower, StraightPath etc….
*If this $207M stands as is then Solus is a bunch of buffoons. Not as much for the valuation but not having an escape clause once Straightpath took off like a rocket.
*Leading up to this we can consider Solus Spectrum Hawks. They have been all over the Spectrum Space buying up shares and debt.
*On 12/31/2016 Solus reported a 1.1M share or 9.5% stake in StraightPath
*Did Solus/Fibertower negotiate this entire thing on their own?
