UK-based set-top box manufacturer Pace is planning a reverse takeover of Google’s Motorola Home STB division.
The company has submitted an indicative, non-binding proposal to Google, which gained the asset earlier this year when it bought Motorola…
UK-based set-top box manufacturer Pace is planning a reverse takeover of Google’s Motorola Home STB division.
The company has submitted an indicative, non-binding proposal to Google, which gained the asset earlier this year when it bought Motorola Mobility, a US phone and STB maker, for US$12.5bn. Reports have valued Motorola Home at £1.5bn-£2bn.
Shares in Pace, which has a market cap of under £600m, were suspended yesterday because the deal would be classed as a reverse takeover under UK regulations.
It is understood that bids have also been submitted by US cable equipment manufacturer Arris Group and Technicolor, the French audiovisual group and STB maker that has recently completed a €191m equity financing.
However, Pace is reportedly leading the pack in the bidding process, despite its relative size and having had a difficult 2011 in which two of its key suppliers suffered disruption due to floods in Thailand.
In July, Pace reported US$1bn in first-half revenues, compared with US$1.2bn in the same period last year.
Speculation that Google could be looking to offload STB assets have followed the company even before it received regulatory approval to acquire Motorola Mobility back in May.
The company was alleged to have tried to acquire the group without its STB element, but that this was shot down by activist investor Carl Icahn, who was seen as a key driver in a full sale of Motorola Mobility. Icahn has since sold down his stake in Motorola.
Because of this, it is thought that the cash rich search giant could consider funding Pace’s deal itself.
The STB assets were reportedly last shopped to potential investors in late 2009, when it was valued at around US$4.5bn. JP Morgan and Goldman Sachs were reported to have been hired to find a buyer at the time.
Meanwhile, Singapore-based electronics contract manufacturer Flextronics has agreed to acquire two Motorola Mobility manufacturing operations in China and Brazil for an undisclosed sum.