Shareholder sues Motorola to block sale to Google

WILMINGTON, Delaware Tue Aug 16, 2011 6:56pm EDT

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WILMINGTON, Delaware (Reuters) - A Motorola Mobility Inc shareholder sued its board on Tuesday for breaching their duties by agreeing to sell the company too cheaply and asked that the sale be stopped.

Investor John Keating said the $12.5 billion all-cash sale to Google Inc also unfairly enriches Motorola board members, while preventing shareholders from enjoying any upside from the company's expected rebound, according to documents filed on Tuesday in Cook County, Illinois Circuit Court.

The lawsuit accuses the board of breaching their fiduciary duties to shareholders and seeks class action status.

Google agreed on Monday to pay a 63 percent premium for Motorola shares. It was the biggest deal to date for the search engine giant and at least one analyst, Colin Gillis of BGC Partners, thought it would take time to pay off for Google.

The lawsuit, however, argued Motorola was just beginning to bear fruit from the restructuring this year that split the company in two. Because they will be cashed out by the board's decision to sell, shareholders are missing out.

"Instead, any economic upside will enrich Google," said the lawsuit.

Such lawsuits have become a routine response to nearly every merger deal, often drawing numerous complaints.

Motorola declined to comment.

The case is John Keating v Motorola Mobility Holdings Inc et al, Circuit Court of Cook County, No. 28854

(Reporting by Tom Hals; editing by Andre Grenon)

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Comments (1)
MediaBlitz wrote:
The GOOG appears to operate like a giant Ponzi scheme with a long string of failures being camouflaged by a similarly long string of nearly worthless acquisitions (at least they are worthless in Google’s hands), all for the benefit of blindsiding small investors by inflating the stock price.  Maybe it’s time to break up the company. Everything they touch seems tainted with some form of impropriety or ethical breach.  Recently, it was revealed that they were failing to account for the actual cost of doing business on the Internet and, by that, they exaggerated their claimed impact on the US economy.  Their books seem somewhat “cooked” and I wouldn’t be surprised if their business model was really broken, and that their only true income was derived from USA-sponsored “Black Ops” against its own citizens, against competitors, and against foreign governments.  This is just speculation, but how far is fiction from fact these days?

Aug 17, 2011 5:34pm EDT  --  Report as abuse
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