Google Said to Get Best Bids for Unit from Pace, Arris
Arris Group Inc. (ARRS) and Pace Plc (PIC) have made the most compelling bids for Google Inc. (GOOG)’s Motorola Home Business, which sells set-top boxes and equipment to cable- television providers, a person familiar with the situation said.
Google, which has been trying to sell the unit, received multiple offers on Dec. 7, said the person, who asked not to be identified because the process is private. A deal has a 50-50 chance of being announced by year-end or postponed because of a complicated financing structure that involves Google retaining some equity and the unit’s patents, the person said. Pace said it made a bid and that it’s halting the trading of its stock.
Google acquired the division through a $12.5 billion purchase of Motorola Mobility Holdings Inc. in May and is selling it now to focus on high-end smartphones as it steps up competition with Apple Inc. (AAPL) Google was looking to fetch about $2 billion for the unit, a person said in August.
Pace, confirming the proposal, said the deal would result in a “reverse takeover,” given its size relative to the Motorola Home Business. Shares of the West Yorkshire, England- based company are suspended until the company can provide more information on a possible transaction or report that discussions have ceased, Pace said.
Talks with Google are at a preliminary stage and there’s no guarantee an agreement will be reached, Pace also said.
Alex Swan, a spokesman at Suwanee, Georgia-based Arris, a cable-equipment maker, declined to comment.
Private-equity firms are unlikely to emerge as buyers of the unit because its technology is being replaced by digital applications, other people familiar with the process said.
The sale of the set-top unit also may be complicated by Motorola’s patent-infringement litigation with TiVo Inc. (TIVO)
Google and Barclays Plc, its financial adviser, are weighing whether to provide financing to prospective buyers, said the people, who also asked not to be identified because the talks are private.
Brandon Ashcraft, a spokesman for Barclays, declined to comment.
Google said in August that it would cut 4,000 Motorola workers and close about a third of its 90 facilities as part of a plan to restore the hardware firm’s leadership in the mobile market.
Google’s share of the smartphone market will slip to 63.8 percent by 2016 from 68.3 percent this year for all devices running the company’s Android software, according to a report from research firm IDC. Apple’s iPhone will rise to 19.1 percent from 18.8 percent, staying in second place.