Proposed Google-Motorola merger subject of new lawsuit

For most folks, $12.5 billion would seem to be a lot of money but for an investor in Motorola Mobility it's apparently not enough. Bloomberg reports that one of that company's shareholders, John W. Keating, has filed a class action lawsuit against both companies, claiming that Motorola could do better than the price Google has offered to acquire the company. Google first announced its plans to purchase Motorola earlier this week.

The lawsuit, filed on Wednesday in Chicago, has Keating claiming, "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." He also has filed suit against all of Motorola's board members and its CEO Sanjay Jha, claiming that they are not protecting the interests of its shareholders. He is seeking the court to block Google's purchase of Motorola. Neither Google nor Motorola have commented on the lawsuit.

Google has said it wishes to acquire Motorola in order to help secure over 17,000 patents that are held by Motorola. Google has said it will run Motorola as a separate business if the acquisition is approved and is successfully closed. Motorola is one of many companies that has made smartphones and tablets for Google's Android operating system. However Google has said that as far as Android is concerned Motorola will be treated like any third party company wanting to license its OS. However many industry analysts have expresses doubt that kind of hands-off relationship will really happen which could cause many Android based smartphone companies to pull its support.

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They might be at the top now, but not for long. The public will realize soon how trashy the OS really is. People can get an iphone or wp7 and not have to worry sbout the numerous issues with android

"However many industry analysts have expresses doubt that kind of hands-off relationship will really happen which could cause many Android based smartphone companies to pull its support."

So were will they go ? The failed so far WP7 ? with sales of 17,000 a DAY worldwide compared to Android's 550,000 a DAY ? Or should they ask Apple to license iOS ? With the death of webOS and RIM's near death what are their options ?

robert_dll said,
If Google is keeping Motorola as a separate company, this isn't a merger, is it?

It will be run as a separate company, but it will be Google owned instead of independent. So technically, it is a merger.

robert_dll said,
If Google is keeping Motorola as a separate company, this isn't a merger, is it?

Google try to keep every part like youtube Picasa Android Chrome as separate entity from Google.
There is almost no intervention by Google itself, except for the budget ,critical decision and interaction between service like Google+.
Motorola Mobile is no exception to this rule.

NesTle said,

Google try to keep every part like youtube Picasa Android Chrome as separate entity from Google.
There is almost no intervention by Google itself, except for the budget ,critical decision and interaction between service like Google+.
Motorola Mobile is no exception to this rule.

Yup. Here is a good example of it. Why would Google release Chromebook and Android Tablet? remember Chromebook is basically just a browser and Android running on Tablet can do so much more.

My feel on this will be:

1) Motorola will not get special treatment for Android running on phones and tablets.
2) However, all bets are off when it comes to the set top boxes. I believe Google will push out Android on the set top boxes to integrate Google TV into these devices.
3) Motorola will continue doing what they are doing for Bluetooth devices. Those products sell.
4) Eventually Google will sell Motorola (at a loss) but Google will keep the patents.

There was an interesting article on why Google paid 12.5 billion for Motorola Mobility. So if they paid for the patents, they got a bargain and got a mobile company for free. So if Google does sell Motorola in the future for anything less than 12.5 billion, they still made a profit. Of course this is all semantics.

http://www.economist.com/blogs...age/2011/08/valuing-patents

maybe if they were buying the other half of motorola too but they're not so yeah. It's a small slice of what was once a large company.

If the value used to be close or exceed the current value of it's stock in the past year and now that Motorola has spun-off it's mobile division I think that the shareholder's case may actually hold some steam.

This was covered on another forum and I am surprised at how ignorant some people are.

SirEvan said,
I'm not gonna lie, when I clicked the article I was expecting to see Apple named as the entity sueing.
The two almost go hand-in-hand these days.

This lawsuit will totally be rejected. No sane judge will block a proposed merger just because one shareholder wants more money from the sale.

deundead said,
This lawsuit will totally be rejected. No sane judge will block a proposed merger just because one shareholder wants more money from the sale.

This is standard operating practice for a takeover. There will be a class action lawsuit filed against *every* takeover of a large public corporation. Most of these lawsuits go nowhere. Enough of them succeed to make it worthwhile to file the lawsuit (and on occasion, for the company to settle and just pay them off).