WILMINGTON, Delaware 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)