Suit against Motorola Mobility: $12.5 bil. from Google too little
Motorola Mobility Holdings Inc. and its chief executive officer, Sanjay Jha, were sued by a shareholder claiming they failed to get the best price when they agreed to sell the company for $12.5 billion to Google Inc.
Investor John W. Keating’s complaint, which was filed yesterday at the state courthouse in Chicago, also names Google and nine members of Motorola Mobilty’s board as defendants.
“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 claims.
Google, the biggest maker of smartphone software, agreed to purchase Motorola Mobility in a transaction that would pay Motorola shareholders $40 a share in cash, or 63 percent more than the stock’s closing price on Aug. 12.
The boards of Mountain View, California-based Google and Motorola Mobility, based in Libertyville, Illinois, approved the transaction, the companies have said.
Keating, in a complaint filed on behalf of all Motorola Mobility stockholders, is accusing the individual board members of breaching their duty to investors and claims the companies have aided and abetted that breach.
He is seeking class-action, or group, status for the case, an order declaring the agreement is unenforceable and an order barring the completion of the sale.
Jennifer Erickson, a Motorola Mobility spokeswoman, said she was unaware of the lawsuit and couldn’t immediately comment on it. Google’s press office didn’t immediately respond to an e- mailed request for comment on the suit.
The case is Keating v. Motorola Mobility Holdings Inc., 11CH28854, in the Cook County, Illinois, Circuit Court, Chancery Division (Chicago).
--With assistance from Brian Womack in San Francisco and Zachary Tracer in New York. Editors: Glenn Holdcraft, Andrew Dunn
To contact the reporter on this story: Andrew Harris in Chicago at aharris16bloomberg.net
To contact the editor responsible for this story: Andrew Dunn at adunn8bloomberg.net