FILE PHOTO: A logo of NEC Corp is pictured at CEATEC (Combined Exhibition of Advanced Technologies) JAPAN 2016 at the Makuhari Messe in Chiba, Japan, October 3, 2016. REUTERS/Toru Hanai/File Photo
NEW YORK (Reuters) -Japanese technology group NEC Corp has been talking to its advisers about the possibility of making an offer for CSG Systems, which provides customer care and billing solutions for cable and phone companies, according to people familiar with the matter.
Tokyo-based NEC has been working with investment bankers at Morgan Stanley on a potential offer for CSG, which has explored a sale over the past year, the sources said, requesting anonymity as the discussions are confidential.
The deliberations between the companies are at an early stage, the sources said, cautioning that a deal is not guaranteed and it's possible that NEC would decide not to submit a formal bid for CSG. A different suitor for CSG could also emerge, the sources added.
Shares of CSG, which has a market value of about $1.7 billion, jumped more than 14% on the news to touch a 52-week high before paring some gains.
NEC and CSG declined to comment. Morgan Stanley did not respond to requests for comment.
Englewood, Colorado-based CSG provides software and business services to telecommunication providers globally, helping them manage functions such as revenue management, customer experience, and payments. Its customers include Comcast, Charter Communications, Dish TV, and MTN Group, according to its website.
Earlier in January, CSG said its current chairman Ron Cooper would step down from his role at the end of his term in May and will be succeeded by another board member Marwan Fawaz, a veteran technology industry executive.
CSG has been battling to latch on its market share, as large telecommunications customers have been trying to cut costs as they look to prioritize hefty investments on infrastructure required for 5G deployment.
In its most recent quarterly earnings report, CSG posted a 3% growth in revenue to $295.1 million, buoyed mainly by a strong performance from its customer experience and payments units. The company also extended its contract with Comcast, which is its biggest customer and accounts for a fifth of its revenue. CSG is scheduled to report its fourth-quarter results on Feb 5.
Founded in 1899, NEC is a provider of information technology and network communications, cloud computing, artificial intelligence, the internet of things, and telecommunications equipment and software. NEC, which has a market value of 3.67 trillion yen ($23.62 billion), was once the world's biggest maker of semiconductors but has since pivoted to focus on areas such as IT services.
($1 = 155.3600 yen)
(Reporting by Milana Vinn in New York; Editing by Chizu and Nick Zieminski)
