PACE has been trumped in its attempt to buy Google’s Motorola Home box business, which will be sold to US rival Arris for $2.35bn (£1.45bn).
The Saltaire-based group, the world-leader in set-top boxes, said it was “unable to reach an agreement with Google on terms that the board believes would have been in the interests of Pace’s shareholders”.
The Motorola Home business designs, manufactures, sells, installs and services set-top boxes for digital and internet protocol (IP) video, satellite and terrestrial broadcast networks.
Arris hailed the cash and shares deal as a “transformational combination of two complementary businesses”.
Pace revealed its interest in the business earlier this month. That forced the suspension of its shares, as the Motorola business’s scale meant a Pace acquisition would be classed a reverse takeover.
Pace said its shares should resume trading shortly.
Chief executive Mike Pulli said: “We have made significant progress in developing our business over the past 12 months by being relentless in pursuing the strategy we announced in November 2011.
“That strategy is to transform our core economics, build on our position as the global leader in PayTV hardware and widen out our business into software, services and integrated solutions.
“We viewed the potential acquisition of Google’s Motorola Home business 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.”
He added Pace is confident on its 2012 financial results and said it “continue(s) to be encouraged about our prospects for the future”.