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AT&T has continued its acquisition spree with a $1.6bn takeover of Straight Path Communications.

The deal, a fraction of the $85bn it paid for Time Warner, is nonetheless pitched at a hefty 162 per cent premium with the telecoms giant paying $95.63 a share in its own stock for the smaller business which closed on Friday at $36.28. The deal values the company’s equity at $1.25bn.

Straight Path’s stock has shot up 150 per cent ahead of the official open.

It is a big turnaround for loss-making Straight Path which specialises in millimetre wave communications that will potentially become valuable in the push for 5G networks.

The company, which was spun off from IDT in 2013, was trading as low as $15 last summer and has been something of a favourite stock to short. The business had been embroiled in a probe by the Federal Communications Commission over its spectrum licences which had put pressure on its stock. It settled in January and liabilities related to the settlement are built into the AT&T deal.

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