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EX-99.1 - PRESS RELEASE - Straight Path Communications Inc.f8k051117ex99i_straightpath.htm
EX-2.1 - MERGER AGREEMENT - Straight Path Communications Inc.f8k051117ex2i_straightpath.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 11, 2017

 

STRAIGHT PATH COMMUNICATIONS INC.

(Exact name of registrant as specified in its charter)

 

Delaware   1-36015   46-2457757

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

 

5300 Hickory Park Drive, Suite 218

Glen Allen, Virginia, 23059

(Address of principal executive offices and zip code)

 

Registrant’s telephone number, including area code: (804) 433-1522

 

Not applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

  

Item 1.01 Entry into a Material Definitive Agreement

 

On May 11, 2017, Straight Path Communications Inc., a Delaware corporation (“Straight Path”), entered into an Agreement and Plan of Merger (the “Verizon Merger Agreement”) with Verizon Communications Inc., a Delaware corporation (“Verizon”), and Waves Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Verizon (“Merger Sub”). Pursuant to the Verizon Merger Agreement, among other things, Merger Sub will be merged with and into Straight Path (the “Merger”) with Straight Path being the surviving corporation of the Merger.

 

At the effective time of the Merger (the “Effective Time”), each share of Class A common stock, par value $0.01 per share, of Straight Path and each share of Class B common stock, par value $0.01 per share, of Straight Path (collectively, the “Shares”) issued and outstanding immediately prior to the Effective Time (other than Shares owned by Verizon, Merger Sub or any other direct or indirect subsidiary of Verizon, and Shares owned by Straight Path or any direct or indirect subsidiary of Straight Path, and in each case not held on behalf of third parties) will be converted into the right to receive a number of validly issued, fully paid in and nonassessable shares of common stock of Verizon (“Verizon Shares”) equal to the quotient determined by dividing $184.00 by the five (5)-day volume-weighted average per share price ending on the second full trading day prior to the Effective Time, rounded to two decimal points, of Verizon Shares on the New York Stock Exchange (the “Verizon Share Value”) and rounded to the nearest ten-thousandth of a share (collectively and in the aggregate, the “Merger Consideration”). It is Straight Path’s intention that (i) the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder, and (ii) the Verizon Merger Agreement shall constitute a plan of reorganization within the meaning of Treasury Regulation Section 1.368-2(g), as noted in the Verizon Merger Agreement.

The board of directors (the “Board”) of Straight Path has unanimously approved the Verizon Merger Agreement and determined that the Verizon Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, Straight Path and its stockholders, and has resolved to recommend that Straight Path’s stockholders approve the Verizon Merger Agreement.

Straight Path has agreed, subject to certain exceptions with respect to unsolicited proposals, not to directly or indirectly solicit competing acquisition proposals or to participate in any discussions concerning, or provide non-public information in connection with, any unsolicited acquisition proposals. However, the Board may, subject to certain conditions, change its recommendation in favor of approval of the Verizon Merger Agreement if, in connection with receipt of a superior proposal or an event occurring after the date of the Verizon Merger Agreement with respect to Straight Path, it determines in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties to Straight Path’s stockholders under applicable law.

The completion of the Merger is subject to the satisfaction or waiver of customary closing conditions, including: (i) approval of the Verizon Merger Agreement by Straight Path’s stockholders; (ii) receipt of regulatory approvals, including receipt of consent to the Merger from the Federal Communications Commission (“FCC”) and the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”); (iii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Verizon Merger Agreement; (iv) the effectiveness of a registration statement on Form S-4 relating to the Merger; (v) subject to specified materiality standards, the continuing accuracy of certain representations and warranties of each party; (vi) continued compliance by each party in all material respects with its covenants; (vii) no event having occurred that has had, or would reasonably likely to have, a Material Adverse Effect (as defined in the Verizon Merger Agreement) on Straight Path; (viii) receipt by Straight Path of an opinion from its tax counsel to the effect that the Merger will qualify as a “reorganization” for United States federal income tax purposes within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended; (ix) receipt of approval for listing the Verizon Shares on the New York Stock Exchange and the NASDAQ Global Select Market, subject to official notice of issuance; and (x) the FCC consent referred to in clause (ii) of this paragraph having become a Final Order (as defined in the Verizon Merger Agreement).

Straight Path has made customary representations and warranties in the Verizon Merger Agreement. The Merger Agreement also contains customary covenants and agreements, including covenants and agreements relating to the conduct of Straight Path’s business between the date of the signing of the Verizon Merger Agreement and the closing of the transactions contemplated under the Verizon Merger Agreement. The representations and warranties made by Straight Path are qualified by disclosures made in its disclosure schedules and Securities and Exchange Commission (“SEC”) filings. None of the representations and warranties in the Verizon Merger Agreement survives the closing of the transactions contemplated by the Verizon Merger Agreement.

 

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The Merger Agreement contains certain termination rights for both Straight Path and Verizon including upon (i) an uncured breach by the other party which results in the failure of a closing condition, (ii) the failure to receive the approval of the Verizon Merger Agreement by Straight Path’s stockholders, and (iii) Straight Path’s Board changing its recommendation in favor of the Verizon Merger Agreement. The Merger Agreement further provides that, upon termination of the Verizon Merger Agreement, under certain circumstances following a change in recommendation by Straight Path in connection with its receipt of a superior proposal or due to an Intervening Event (as defined in the Verizon Merger Agreement), Straight Path may be required to pay Verizon a termination fee equal to $38 million. Either Straight Path or Verizon may terminate the Verizon Merger Agreement if the closing of the Merger has not occurred on or before February 12, 2018 (as it may be extended as provided below, the “Termination Date”); provided, however, that if regulatory approvals have not been obtained and all other conditions to closing have been satisfied or waived, the Termination Date will automatically be extended for an additional one hundred and eighty days. In addition, Verizon is required to pay Straight Path an aggregate amount equal to $85 million (the “Parent Termination Fee”) in the event that the Merger has not closed by the extended Termination Date, and all conditions to closing other than receipt of FCC consent or HSR approval (or expiration of the waiting period under the HSR) have been satisfied or waived. In the event that the Verizon Merger Agreement is terminated other than as a result of Verizon’s breach or under circumstances in which Verizon is required to pay the Parent Termination Fee, Straight Path will be required to pay Verizon an amount equal to the AT&T Termination Fee (as defined in the Verizon Merger Agreement) paid by Verizon on Straight Path’s behalf.

 

The Merger Agreement has been attached as an exhibit to this report to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Straight Path, Verizon or Merger Sub, or to modify or supplement any factual disclosures about Straight Path or Verizon in their public reports filed with the SEC. The Merger Agreement includes representations, warranties and covenants of Straight Path, Verizon and Merger Sub made solely for purposes of the Verizon Merger Agreement and which may be subject to important qualifications and limitations agreed to by Straight Path, Verizon and Merger Sub in connection with the negotiated terms of the Verizon Merger Agreement. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to Straight Path’s or Verizon’s SEC filings or may have been used for purposes of allocating risk among Straight Path, Verizon and Merger Sub rather than establishing matters as facts.

 

The foregoing summary of the Verizon Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Verizon Merger Agreement, which is attached to this report as Exhibit 2.1 and is incorporated herein by reference.

 

In addition, Straight Path’s majority shareholder, Howard Jonas, has entered into a voting agreement with Verizon concurrently with the entry into the execution of the Verizon Merger Agreement (the “Voting Agreement”). The Voting Agreement provides that Mr. Jonas (holding his Class A shares through a trust) will vote his Class A shares in Straight Path in favor of the Merger and the other transactions contemplated in the Verizon Merger Agreement, on the terms and subject to the conditions set forth in the Voting Agreement. The Voting Agreement will terminate automatically upon the earliest to occur of (i) the effective time of the Merger, (ii) the valid termination of the Verizon Merger Agreement pursuant to Article VII thereof, (iii) a change of recommendation by the Board in the event of a Superior Proposal or Intervening Event, (iv) any change being made to the terms of the Verizon Merger Agreement that would terminate the Trust’s or Mr. Jonas’s obligation to vote in favor of the Merger (on the terms and subject to the conditions in the Verizon Merger Agreement) or (v) February 12, 2018. Straight Path is not a party to the Voting Agreement.

 

The foregoing summary of the Voting Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the form of Voting Agreement, which is attached as Exhibit A to the Verizon Merger Agreement, which is attached to this report as Exhibit 2.1 and is incorporated herein by reference.

 

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Item 1.02 Termination of Material Definitive Agreement

 

On May 11, 2017, the Agreement and Plan of Merger, dated as of April 9, 2017, by and among the Company, AT&T Inc. and Switchback Merger Sub Inc. (the “AT&T Merger Agreement”) was terminated in its entirety by the Company pursuant to the terms and conditions of the AT&T Merger Agreement. Also on May 11, 2017, Verizon paid to AT&T, on behalf of the Company, the $38 million Company Termination Fee (as defined in the AT&T Merger Agreement) concurrently with the termination of the AT&T Merger Agreement pursuant to the terms and conditions thereof.

 

Item 8.01 Other Events

 

On May 11, 2017, the Company issued a press release relating to the entry into the Verizon Merger Agreement and the termination of the AT&T Merger Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

 

IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC

 

Straight Path plans to file with the SEC and mail to its stockholders a Proxy Statement/Prospectus in connection with the proposed transaction. THE PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT VERIZON, STRAIGHT PATH, THE PROPOSED TRANSACTION AND RELATED MATTERS. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN THEY BECOME AVAILABLE. Investors and security holders will be able to obtain free copies of the Proxy Statement/Prospectus and the other documents filed with the SEC by Verizon and Straight Path through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the Proxy Statement/Prospectus by phone, e-mail or written request by contacting the investor relations department of Straight Path at the following:

 

  Straight Path Communications Inc.  
Address: 5300 Hickory Park Dr. Suite 218  
  Glen Allen, VA 23059  
  Attention: Investor Relations  
Phone: 804-433-1523  
E-mail: yonatan.cantor@straightpath.com  

 

PARTICIPANTS IN THE SOLICITATION

 

Straight Path and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transactions contemplated by the Verizon Merger Agreement. Information regarding Straight Path’s directors and executive officers is contained in Straight Path’s Form 10-K for the year ended July 31, 2016 and its proxy statement dated November 22, 2016, which are filed with the SEC. A more complete description will be available in the Proxy Statement/Prospectus.

 

SAFE HARBOR

 

In this communication, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2016 and our other periodic filings with the SEC (under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"). We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this communication, whether as a result of new information, future events or otherwise.

 

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NO OFFER OR SOLICITATION

 

This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 

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Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits: 

 

Exhibit Number   Description

2.1*

 

 

 

Agreement and Plan of Merger, dated as of May 11, 2017, by and among Straight Path Communications Inc., a Delaware corporation, Verizon Communications Inc., a Delaware corporation and Waves Merger Sub I, Inc., a Delaware corporation

99.1   Press Release issued by Straight Path Communications Inc. on May 11, 2017

 

* Straight Path has omitted schedules and other similar attachments to such agreement pursuant to Item 601(b) of Regulation S-K. Straight Path will furnish a copy of such omitted document to the SEC upon request.

 

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  STRAIGHT PATH COMMUNICATIONS INC.
     
Dated: May 11, 2017 By: /s/ Jonathan Rand
    Name: Jonathan Rand
    Title:  Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit Number   Description

2.1*

 

 

 

Agreement and Plan of Merger, dated as of May 11, 2017, by and among Straight Path Communications Inc., a Delaware corporation, Verizon Communications Inc., a Delaware corporation and Waves Merger Sub I, Inc., a Delaware corporation

99.1   Press Release issued by Straight Path Communications Inc. on May 11, 2017

 

 * Straight Path has omitted schedules and other similar attachments to such agreement pursuant to Item 601(b) of Regulation S-K. Straight Path will furnish a copy of such omitted document to the SEC upon request.

 

 

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