AT&T stated that the expected WCS rule changes and NextWave acquisition represent an alternative approach to creating additional wireless network capacity to help support skyrocketing wireless data usage on smartphones and tablets. If approved, the proposal will enable AT&T to begin initial deployment of WCS spectrum for added 4G LTE capacity, in approximately three years.
Under the terms of the agreement, AT&T will acquire all the equity of NextWave for approximately $25 million plus a contingent payment of up to approximately $25 million and, through a separate agreement with NextWave’s debtholders, all of the company’s outstanding debt will be acquired by AT&T or retired by NextWave, for a total of $600 million in cash. The outstanding debt held by NextWave’s bondholders will be satisfied through cash and a transfer of selected NextWave assets. NextWave’s debtholders have agreed to the terms, and a majority of its shareholders have agreed to support the transaction.
The transaction is subject to review by the Federal Communications Commission and to other customary closing conditions. Additionally, NextWave’s transfer of assets may be subject to Hart-Scott-Rodino review by the Federal Trade Commission and Department of Justice. AT&T anticipates closing the transaction by the end of 2012.