Google had recently recommended purchasing Motorola Mobility at the cost of $12.5 billion, at the price of $40 each share. As stocks of Motorola closed at $24.47 when the agreement was made public, the costs have increased since then and have traded over $38 most of the time. While most of the 63% premium agreed upon by Google a little too steep, John W. Keating, a Motorola Mobility shareholder, does not seem to repeat the same sentiment. He feels that the Mountain View based firm is purchasing Motorola Mobility for “pennies on the dollar.”
John W. Keating is filing a complaint in the state courthouse in Chicago against both Motorola and its CEO Sanjay Jha. The suit as well names Google and the other 9-member Motorola Mobility board as defendants. John believes that the cost of $12.5 billion is not good enough keeping in mind the 17,000 patents presently held by Motorola and their significance to Google, together with the present market cost of the company.
The lawsuit argued Motorola was just beginning to bear fruit from the restructuring this year that split the company in two. Since they will be cashed out by the choice to sell, investors are missing out.
The complaint said, “Instead, any economic upside will enrich Google.”
Keating as well criticized the board members, alleging they disobeyed their responsibility to shareholders, and blamed Google to help and abet an infringement of these responsibilities. According to Keating, he would as well look for class action, and requested the court to forbid the close of the transaction.