UK firm Pace has confirmed it has made an early-stage proposal to search giant Google to acquire Motorola Mobility’s set-top box business – a transaction which, if successful, would considerably increase its reach in the US market.
Describing the discussions as being at a “preliminary” stage, the Yorkshire firm cautioned that there is no certainty as to whether any agreement will be reached. Several other bids are also believed to have been tabled for the Motorola Home unit by other interested parties, most likely for a sum in the billions of dollars.
Google acquired Motorola Mobility earlier this year for US$ 12.5bn – saying at the time that the purchase would considerably enhance its patent portfolio – but has shown only lukewarm interest in the set-top box business, which supplies many of the biggest cable companies and telcos in the US.
The potential acquisition by Pace of the Motorola Home business would be classified as a “reverse takeover” under the UK Listing Rules given its size relative to Pace, and as a result the latter’s ordinary shares have been suspended from trading as of the afternoon of December 10th.
Motorola Home suffered an operating loss of US$ 63mn on revenues of US$ 1.204bn in the six months to October 31st of this year, while Pace posted pre-tax profits of US$ 21.4mn on revenues of US$ 1bn for the first half of this year.