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India's Videocon considering Motorola phone business

Motorola has plans to spin out its phone business, but Videocon might pre-empt its plans with a unsolicited bid for the Razr maker.

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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Tom Krazit

Motorola's phone business has at least one suitor: India's Videocon.

IDG News Service reported Wednesday that Videocon, which sells consumer electronics devices in India, is interested in bidding on the phone portion of Motorola's cell phone business, which is destined to become a separate company one way or another. Videocon is building its own GSM network in India, and might want a ready-made slate of phones to put in its retail stores and run on its network.

It seemed that selling the division was Motorola CEO Greg Brown's first choice, when faced with the dilemma of cleaning up the mess at Motorola. But no one stepped forward with a bid (at least publicly) after Brown declared Motorola was considering "strategic alternatives" for the business in January.

After Motorola went public with its plans to get rid of mobile phones one way or another, my colleague Maggie Reardon noted that move could bring potential buyers forward enticed by Brown's decision to put "lipstick on a pig," or to make the phone business look more attractive by hiding the set-top boxes and industrial communication equipment.

Any likely suitor will probably get a decent deal on Motorola's phone business: Fortune noted a blog post by Chad Brand of Peridot Capital Management valuing Motorola's non-phone businesses at $8 a share. The company's stock is currently trading in the mid-$9 range.