Google had recently proposed to buy out Motorola Mobility at the price of $ 12.5 billion, at the cost of $40 a share. While Motorola's stocks closed at $24.47 when the deal was made public, the prices have risen up since then and have traded over $38 most of the time.
While most of the industry experts feel that the 63% premium agreed upon by Google a little too steep, John W. Keating, a Motorola Mobility shareholder, doesn't seem to echo the same sentiment. He feels that the Mountain View based firm is buying Motorola Mobility for "pennies on the dollar".
John W. Keating is filing a complaint in the state courthouse in Chicago against both Motorola and its CEO Sanjay Jha. The suit also names Google and the other 9-member Motorola Mobility board as defendants. John feels that the price of $12.5 billion is not good enough keeping in mind the 17,000 patents currently held by Motorola and their importance to Google, along with the current market price of the company.
The lawsuit 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.
Keating also condemned the board members, claiming they violated their duty to investors, and accused Google to assist and abet a violation of these duties. Keating said that he would also seek class action, and asked the court to prohibit the completion of the transaction.