Investor John W. Keating alleges that the $12.5 billion price tag Google offered was simply not enough, despite Google paying a 63 percent premium on Motorola’s shares and agreeing to an astounding break-up fee.
“The offered consideration does not compensate shareholders for the company’s intrinsic value and stand-alone alternatives going forward, nor does it compensate shareholders for the company’s value as a strategic asset for Google,” Keating’s complaint, which was filed in Chicago, reads.
Google surprised the mobile industry when it announced plans to acquire Motorola Mobility on Monday. The news has shaken up the mobile industry and made many pundits wonder what the action means for Google’s Android OS. Google says Motorola Mobility will be run as a separate business from Google, but many people believe this is impossible and that Google will show considerable favorability to Motorola’s hardware devices.
Keating is seeking class-action status on the lawsuit and wants regulatory authorities to reject the deal. But the complaint seems a little hollow after considering Google agreed to pay $40 per share of Motorola Mobility, which is a 63 percent premium on what the stock’s value on Aug. 12. Google also agreed to what one analyst called the “highest-ever break-up fee agreed upon in this industry”. Google will pay Motorola Mobility $2.5 billion if the acquisition is foiled by regulators.
What do you think of the lawsuit? Do you have any qualms about the Google-Motorola deal?