* Motorola eyeing potential $4.5 billion unit sale
* Company declines comment, says still plans mobile split
* Analysts say sale could hurt phone unit
* Motorola shares off 1.7 pct
(Adds analyst comment, paragraphs 11-12)
NEW YORK, Nov 11 Motorola Inc MOT.N is in the
early stages of looking into a potential sale of its $4.5
billion television set-top box and network equipment business,
two sources said on Wednesday.
Motorola is in the early stages of seeking buyers for the
unit, whose suitors include private equity firms and other
communications equipment makers, said one source familiar with
Motorola may decide to keep the unit in the end, said the
source, who was not authorized to speak with the media.
J.P. Morgan Chase & Co and Goldman Sachs Group Inc are
advising Motorola on the possible sale, the source said.
J.P. Morgan and Goldman Sachs declined to comment.
Motorola, which has been losing market share in its
cellphone business for years, declined to comment, but said it
was still focused on its previously stated plan to separate its
handset business from the rest of the company.
Analysts said there could be a lot of interest in the home
and networks unit, particularly because Motorola has a strong
market share in the set-top box segment, where it is bigger
than Scientific Atlanta, owned by Cisco Systems Inc (CSCO.O).
But RBC analyst Mark Sue said that a divestiture of any of
Motorola's other business units could hurt Motorola's
money-losing handset business.
"The mobile devices business still needs the rest of the
businesses to fund its operations. It hasn't really recovered
fully yet so it would be a little too early to cut off the
lifeline," Sue said.
While growth in the mobile network equipment market has
slowed dramatically in recent years, rival gear makers could
see Motorola as a way to increase their market share,
particularly in the United States.
Avian Securities analyst Matthew Thornton said a $4.5
billion price tag would represent an 18 percent premium over
his estimated valuation of $3.8 billion for the home and
networks unit, based on operating earnings.
Analysts at Avian Securities said that their sum-of-parts
analysis values Motorola's Home & Networks Mobility Division
segment at $4.25 billion, according to an emailed report.
"Simply put, the deal price cited ... is not far off from
our valuation," the report said.
Potential suitors could include Ericsson (ERICb.ST),
Samsung Electronics Co Ltd (005930.KS), Alcatel Lucent SA
ALUA.PA or Nokia Siemens, a venture of Nokia NOK1V.HE and
Siemens AG (SIEGn.DE), analysts said.
The Wall Street Journal cited China's Huawei Technologies
Co Ltd [HWT.UL] and UK based Pace Plc PIC.L as other
The Wall Street Journal cited potential suitors as Silver
Lake Partners [SILAK.UL] and TPG [TPG.UL].
TPG declined comment and Silver Lake Partners was not
immediately available for comment.
Motorola spokeswoman Jennifer Erickson said the company
does not comment on rumor or speculation.
"Separation into two independent, publicly traded companies
(Mobile Devices and Broadband Mobility Solutions, which
comprises Enterprise Mobility Solutions and Home and Networks
Mobility Solutions) is the publicly stated long-term goal of
Motorola," Erickson said. "We remain committed to the
separation goal and continue to believe that it is the right
strategy to position Motorola for long-term success."
Motorola shares were down 15 cents, or 1.7 percent, at
$8.70 in afternoon trading on New York Stock Exchange.
(Reporting by Sinead Carew, Jessica Hall and Megan Davies in
New York; Editing by Andre Grenon, Tim Dobbyn, Gary Hill)