Google's move to purchase Motorola Mobility for $12.5 billion was certain to face some hurdles, but few would expect the first to be a lawsuit filed against both companies by a Motorola shareholder. Investor John W. Keating accuses the companies of not reaching a fair price on the deal and has sued Motorola Mobility, its CEO Sanjay Jha, nine of its board of directors, and Google.
According to BusinessWeek, Keating filed the lawsuit at the state courthouse in Chicago, accusing the individual board members for breaching their duty to investors and that Motorola Mobility and Google assisted in the breach. He is seeking class-action status for the case to block the deal and has stated the following:
“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.”
The move comes as quite a surprise considering that Google's agreement to a $12.5 billion price tag is already a 60% markup on Motorola's actual market value. However, Google is getting a lot out of the deal in terms of a massive patent portfolio that will give Google more leverage to defend the Android platform from the recent barrage of patent attacks. The acquisition of Motorola will add over 17,000 patents and an additional 7,500 pending patents to Google's war chest.