Mergers & acquisitions

Motorola Nears Deal for Terayon

Motorola is closing in on a deal to acquire Terayon, and official word detailing the deal could come down as soon as Monday, April 23, sources say.

Full financial terms could not be confirmed by Friday's deadline, but sources indicate that Motorola will pay in the range of $2 to $2.25 per share for Terayon and its portfolio of digital video gear. Based on the 77.64 million shares Terayon had outstanding in mid-January, the deal could fetch in the range of $155 million to $175 million.

The speculated price per share is below previous expectations that Terayon could get up to $3 per share, a decline possibly caused by Terayon's lackluster numbers for the end of 2006 and disappointing guidance for the first half of 2007.

The premium on such a deal eroded a bit as chatter on Wall Street of an imminent deal reached a fever pitch Friday afternoon, causing Terayon shares to rise sharply, closing at $1.85 a piece, up 25 percent (or 37 cents) for the day.

If Motorola lands Terayon, it would have beaten out a cast of potential suitors, including Cisco Systems Inc. (Nasdaq: CSCO) and Harmonic Inc. (Nasdaq: HLIT) (See Moto & Cisco Joust for Terayon.)

Although the bidding war for Terayon was active at the end of 2006 and into the start of 2007, activity appeared to slow down last month as bidders evaluated concerns stemming from Terayon's raft of legal troubles. (See Terayon Sweepstakes Stalls.)

Some nagging concerns may have been lifted on April 2, when Terayon disclosed the Securities and Exchange Commission had terminated an investigation tied to the company's accounting review and its set of agreements with a "certain customer," which was later found to be Thomson Broadcast.

On Friday, Terayon and Motorola officials declined comment on talks of an imminent deal.

— Jeff Baumgartner, Site Editor, Cable Digital News

Pancakes 12/5/2012 | 3:10:03 PM
re: Motorola Nears Deal for Terayon IMO, this will trigger a swarm of lawsuits for Terayon execs and Motorola.

Terayon should have sold at the SAME PPS as when they announced the self-audit/restatement in March. Selling low makes it appear that they purposely initiated the audit/restatement to bring down the value and sell cheaper. Hurting a lot of people in the process.

More to come!
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