On2’s shareholders – or at least a vocal subgroup of them – are not at all happy about the planned Google acquisition. Two lawsuits have been filed to stop the deal, with both complaints alleging that On2 more or less served itself on a silver platter.
Google offered to acquire On2 for 60 cents per share (or $106.5 million in all), which represented a 57 percent premium over On2’s closing price the day before. However, the day after the acquisition was announced, On2 gave its best quarterly financial report in over a year, which made the deal look less sweet.
Also, according to an excerpt Holly Sanders Ware pulled from the Delaware lawsuit (the other complaint was filed in New York), “[D]efendants agreed to such terms without any hard evidence that they sought a third-party buyer for On2 and no evidence that On2’s directors shopped the company in order to obtain the best possible price.”
And some investors are indeed very unhappy about all of this. During On2’s second quarter conference call, even after the acquisition was put off-limits, the vast majority of a Q&A session revolved around it. There were occasional references to lies and jail time, too.
Anyway, both lawsuits seek to block Google’s acquisition, and the terms of the deal do say that it’s subject to On2 stockholder approval, so this may be the start of a serious dispute.
One more interesting note: the On2 deal represented Google’s first attempt to acquire a public company.
