The TV set-top box maker Pace lost out in a bid battle to massively expand its US business yesterday as it baulked at the price demanded by internet giant Google for its Motorola Home division.
The fate of Motorola's set-top box arm has been in doubt ever since Google paid $12.5bn (£7.7bn) for the US mobile-phone maker earlier this year – its biggest acquisition to date.
Pace already derives around two-thirds of its revenues from the US, but was weighing a $2bn bid for a business which would have significantly expanded its footprint in the country. But Google eventually sold the company to US media-technology firm Arris in a $2.35bn cash and shares deal.
Because of the size of the proposed acquisition – which would have been classed as a reverse takeover – Pace's shares have been suspended since last week. Sources said that management were unwilling to over-pay for the business.
Mike Pulli, its chief executive, said: "We viewed the potential acquisition as an opportunity to accelerate our stated strategy, but only if real shareholder value could be delivered.
"Although we had the support of our major shareholders and committed facilities, we could not reach an appropriate conclusion to the potential transaction."