Straight Path Communications gave AT&T five days to improve on its acquisition offer of $1.6 billion, after an unnamed “multi-national telecommunications company” made a “superior proposal” to buy the spectrum licence holder for $1.8 billion.

While Straight Path declined to name the rival bidder, the ultimatum comes a week after it was reported Verizon is considering hijacking the deal.

AT&T announced its deal for Straight Path, which holds licences for spectrum approved by the Federal Communications Commission (FCC) for 5G, in early April. Its offer included a $1.25 billion payment to shareholders and would see AT&T take on the company’s liabilities and pay fees due to the FCC.

In a statement, Straight Path revealed the new proposal includes an offer “to acquire 100 per cent of the issued and outstanding shares of Straight Path for $104.64 per share”, whereas AT&T’s deal was $95.63 per share.

“AT&T has the option for the next five business days to negotiate a possible amendment of that agreement to match or exceed the bidder’s offer,” Straight Path said.

During AT&T’s Q1 earnings call, CEO Randall Stephenson said he was aware of the rival offer and would be “evaluating that over the next few days to decide how to respond.”

If Straight Path does decide to abandon the AT&T deal, it will have to pay a $38 million termination fee to the telecoms company, which Straight Path said the unnamed bidder is willing to do on its behalf.