Motorola Mobility Faces Suit Over $12.5 Billion Deal With Google

August 18, 2011 | By | Reply More

According to the folks at Bloomberg, on Aug 16, a shareholder at Motorola Mobility has sued the Motorola Mobility Holdings Inc. and its CEO, Sanjay Jha. Share holder claimed that it was an inappropriate deal which was made with Google to sell the company for just $12.5 billion. Shareholders did not get the best price for their shares.

That shareholder is John W. Keating, who is an Investor. He filed the complaint at the state courthouse in Chicago, IL. This claim was filed the same day when the deal was made, so the defendants include nine members from board of directors of Motorola Mobility and Google.

Keaton stated that, the offered price is not the compensation to the shareholders which they deserve and also the intrinsic value of the company. It also does not compensate the shareholders because now company is Google’s asset and its value is not the same as it used to be.

Google bought the Moto Mobility for $12.5 billion and deal was made by the both company’s board of directors. In this deal, Every Moto shareholder was to be paid $40 per share which is 63% more than the closing price of the stock they had. Now only thing left in the deal is the clearance from Justice Department of United States, after that Google will get almost 17000 Motorola Mobility’s patents. Google is already having patent law suits with its rivals, Apple inc. and Microsoft Corporation. Still Google is the biggest Mobile OS seller and is competing against both Apple (iPhone creators) and Microsoft (Windows Phone creators).

Keaton is completely against the Moto-Google deal. He said that the share holders of Motorola Mobility deserve to take part in the future successes of the company. This is the fault of the individual board of directors who are breaching their duties. Keaton is seeking a class or group status for the case so that the agreement is declared unenforceable and an order to stop the sale.

Google and Motorola Mobility, both companies are declining to comment on this matter right now.

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Category: Google, Motorola

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