UK set-top boxes maker Pace Plc (LON:PIC) said today it was unable to agree satisfactory terms for a potential acquisition of Google Inc’s (NASDAQ:GOOG) Motorola Home business, allowing Arris Group Inc (NASDAQ:ARRS) to ink its own deal for the purchase of that unit.
In a statement, Pace noted it had requested that the Financial Services Authority (FSA) lifted the suspension of its securities from the Official List. The shares were suspended from trading earlier this month, after the company announced it had made an indicative, non-binding proposal for the Internet group’s Motorola Home subsidiary.
In his comment on the matter, Pace CEO Mike Pulli said that the UK firm had considered the potential move to be an opportunity to step up its strategy of transforming core economics, strengthening its position in the PayTV hardware area and extending its operations into software, services and integrated solutions. However, Pace had failed to reach an agreement on terms that would have been in the interests of its stockholders.
Arris announced it had signed a cash-and-stock deal worth USD2.35bn (EUR1.8bn) to acquire the particular business from Google. About USD2.05bn of the consideration will be provided in cash and funded with debt. Following completion, Google will hold a 15.7% stake in the US communications technology specialist.
UK set-top boxes manufacturer Pace Plc (LON:PIC) confirmed it had made an indicative, non-binding proposal and was currently in preliminary talks over a potential deal to buy Google Inc’s (NASDAQ:GOOG) Motorola Home business unit.
The statement was issued in response to media speculation over an offer from Pace.
The share of the UK suitor were suspended from trading until sufficient information is provided on a potential transaction, or an announcement is made that negotiations ended, the buyer said.
A deal, if reached, would be carried out as a reverse takeover, but there is no guarantee that the ongoing talks would lead to an agreement, Pace explained. Its board would only pursue a transaction if it served the best interest of shareholders, it added.
Reuters cited Pivotal Research Group analyst Brian Wieser as saying that, based on how the deal is structured, Google could get a price in the range of billions of dollars for the Motorola Home business. Meanwhile, an earlier report by Bloomberg quoting an unnamed source, said Google was seeking USD2bn (EUR1.5bn) for the unit.
The target business delivered revenues of USD797m and an operating result of USD25m in the third quarter, as Google’s financial results show. It makes set-top boxes for digital and Internet protocol (IP) video, satellite and terrestrial broadcast networks and Internet protocol television (IPTV) distribution systems, broadband access network infrastructure platforms, as well as software solutions for cable TV and telecommunication service providers.
The web search giant bought it as part of its USD12.5bn purchase in May of Motorola Mobility.