Google Sets Deadline for Motorola Home Bids
Google (Nasdaq: GOOG) has set a deadline of today (Dec. 7) to secure bids for Motorola Mobility LLC 's Home unit, with Arris Group Inc. (Nasdaq: ARRS) and a number of private equity firms expected to be among the bidders, reports The Wall Street Journal, citing three unnamed sources. (See Could An Arris-Motorola Marriage Work? )
The paper said Google might extend the deadline, noting that Pace plc and Technicolor (Euronext Paris: TCH; NYSE: TCH) could also join the fray in a deal expected to fetch in the range of US$1.5 to $2.5 billion. Sources have told Light Reading Cable that Google could get about $2 billion for the assets, and that Google is anxious to get a deal done before the end of the year. Google has hired Barclays Capital to vet the sales process. (See Google Taps Barclays to Shop Motorola Home and Google Preps Sale of Motorola Home.)
As part of any deal, Google is also looking to strip out some of the intellectual property tied to Motorola Home, a unit that makes set-tops, cable modems and cable network access gear, the paper added, corroborating what sources have also told Light Reading Cable in recent months.
One industry insider says Google has not gotten the amount of action on the assets that it had anticipated. Regardless, sources have also confirmed that Arris is expected to make a play for Motorola Home, though the vendor will likely need special financing to pull off the deal. Pace plc and Ericsson AB (Nasdaq: ERIC) have also expressed interest, according to sources, though Ericsson's interest appears to have cooled. (See Don't Count Out Ericsson.)
The TiVo factor
One big question heading into this part of the process is the overhang created by TiVo Inc. (Nasdaq: TIVO)'s pending patent litigation with Motorola, which is taking place in the U.S. District Court for the Eastern District of Texas Texarkana Division.
On Wednesday, the judge in the case, Rodney Gilstrap, issued the claim construction brief, a critical step in which the court interprets the language of TiVo's intellectual property, including TiVo's key Multimedia Time Warping System patent (No. 6,233,389). After that, the parties can either settle or prepare for a court clash that's anticipated to get underway in May 2013. (See Cisco, Motorola May Be Next to Settle With TiVo and TiVo Sues Motorola & Time Warner Cable.)
That overhang is significant because TiVo has been successful in winning court battles or scoring lucrative settlements. It's not yet known how or if Google will factor the pending litigation with TiVo into the terms of a Motorola asset sale, or if it intends to settle the TiVo issue before moving the sales process to its final phases. (See AT&T to Pay TiVo $215M-Plus to Settle DVR Fight, Verizon to Pay TiVo $250M to Settle DVR Fight , Dish, EchoStar to Pay TiVo $500M to Settle Suit and No Cash Swap in Microsoft-TiVo Settlement.)
Motorola and Google were not immediately available for comment Friday morning. Google closed its $12.5 billion acquisition of Motorola Mobility on May 22. Cable industry vet Marwan Fawaz took the helm of Motorola Home in June. (See Google Closes $12.5B Motorola Deal and Motorola's Home Unit Hires New Leader .)
— Jeff Baumgartner, Site Editor, Light Reading Cable