"Discussions with Google are currently at a preliminary stage and there is no certainty as to whether any agreement regarding any transaction will be reached," Pace said in a statement.
The offer is one of several bids for the unit, including from private equity firms, that Google received on Friday, according to a person familiar with the situation.
Google acquired the set-top box maker as part of its $12.5 billion acquisition in May of Motorola Mobility, which was largely motivated by a desire to snap up its large portfolio of communications patents.
Since acquiring Motorola, Google has moved to revamp the company's loss-making mobile phone business, while appearing less interested in the set-top business.
"It's a fine business, it's just not core to Google," said Pivotal Research Group analyst Brian Wieser.
Motorola and Cisco Systems Inc's Scientific Atlanta dominate the U.S. market for cable television set-top boxes and for the back-end infrastructure that manages the transmission of video signals to the boxes, said Wieser.
He estimated that the Motorola's home business could fetch "in the billions" of dollars, depending on how the deal is structured, such as whether patents are included.
Arris Group, a cable equipment maker, also made a bid for the business, according to a report by Bloomberg. Arris Group and Google declined to comment.
Google, the world's No.1 Web search engine, has increasingly expanded into the hardware business as consumers turn from their personal computers to smartphones and other gadgets to access the Internet.
Google worked closely with companies such as Asus and LG Electronics to develop Nexus-branded smartphones and tablets that Google sells directly on its website. And Google has said it is shifting the emphasis at Motorola Mobility's phone unit from low-end phones to more innovative smartphones.
Some analysts had speculated that Google might use the Motorola set-top box business to help it gain a foothold in the living room, where its nearly three-year-old Google TV efforts have so far failed to make a huge splash with consumers.
"It seems like it would make sense to be able to integrate that into a set top box," said Needham & Co. analyst Kerry Rice, referring to Google TV.
But he said Motorola Home's customers cable providers and telecommunications companies were different than the advertising agencies and consumers that Google is accustomed to working with.
The Motorola Home business generated $797 million in revenue in the third quarter, according to Google's financial results, with $25 million in operating income.
Pace said its shares had been suspended from trading in London as the potential acquisition would be classified as a "reverse takeover" deal given the size of the acquisition relative to Pace.
A deal could help Pace recover from the three profit warnings it issued in 2011 due to natural disasters such as flooding in Thailand and the earthquake and tsunami in Japan that damaged the group's supply chain.
"Pace already has a somewhat stretched balance sheet, they have done a good job over the past 12 months to try to pay down that debt but how they would finance such a large acquisition is a question, but not an insurmountable one," said Numis Securities analyst Nick James.Shares of Google were just a shade higher in Monday afternoon trading, up 80 cents, or 0.1 percent, to $685.01