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Investing.com -- Shares of CSG Systems (NASDAQ:CSGS) surged Wednesday, currently up over 8% on news that NEC Corp, the Japanese technology giant, is in talks with its advisers about potentially making an offer for the Colorado-based provider of customer care and billing solutions.
According to Reuters, citing sources familiar with the matter, NEC has been working with Morgan Stanley (NYSE:MS) to explore an offer for CSG, which has been open to the idea of a sale for the past year.
The discussions are said to still be in the early stages, and there is no guarantee that a formal bid will be made, Reuters cautioned.
They add that it is also possible that another suitor could emerge for CSG, which has a market value of approximately $1.6 billion.
CSG Systems, based in Englewood, Colorado, serves major telecommunications providers such as Comcast (NASDAQ:CMCSA), Charter Communications (NASDAQ:CHTR), and Dish TV, offering software solutions for functions including revenue management, customer experience, and payments.
Despite its strong customer base, CSG has faced challenges in expanding its market share as telecommunications companies look to reduce costs amid heavy investments in 5G infrastructure.
The company recently reported a 3% growth in quarterly revenue, largely driven by its customer experience and payments units. Additionally, it extended its contract with Comcast, its largest customer.
In early January CSG also announced that its chairman, Ron Cooper, would step down in May, with Marwan Fawaz, a seasoned technology executive, set to take over.