Details of Google (GOOG)/Motorola (MMI) Acquisition, Who Negotiated Right?
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In an SEC filing released by Motorola Mobility Holdings (NYSE: MMI), it was revealed that the company agreed to be acquired by Google (Nasdaq: GOOG) for $40 per share after only a few days of negotiations and no other bidders.
Google initially came to Motorola in early July and offered to buy the company for $30 per share on August 1st. MMI rejected that bid and asked for $43.50 per share which Google declined. A counter bid of $37 was offered on August 9th by Google and was answered by Motorola with a suggestion of $40.50 per share. Later that day Google contacted MMI with a $40 per share bid which the company later accepted.
The board of directors at Motorola did not feel they would receive a more competitive bid from another company and felt that going public with the action may actually hurt the company if a higher counter bid was not offered.
Google was advised by Lazard Ltd. (NYSE: LAZ) while Motorola was advised by Centerview Partners, Barclays Capital (NYSE: BCS), and Qatalyst during the negotiations.
So in the end, who is the real winner? Google may now have control of a mobile phone production company to go along with its Android operating system, but was the price to high? Motorola was able to negotiate the purchase price to $40 per share, but without any bids from other companies how does management know that another company would have offered more? With shares trading down in the mid $20 range before the news of the acquisition, it is easy to say that shareholders of MMI are easily the real winners.
Google initially came to Motorola in early July and offered to buy the company for $30 per share on August 1st. MMI rejected that bid and asked for $43.50 per share which Google declined. A counter bid of $37 was offered on August 9th by Google and was answered by Motorola with a suggestion of $40.50 per share. Later that day Google contacted MMI with a $40 per share bid which the company later accepted.
The board of directors at Motorola did not feel they would receive a more competitive bid from another company and felt that going public with the action may actually hurt the company if a higher counter bid was not offered.
Google was advised by Lazard Ltd. (NYSE: LAZ) while Motorola was advised by Centerview Partners, Barclays Capital (NYSE: BCS), and Qatalyst during the negotiations.
So in the end, who is the real winner? Google may now have control of a mobile phone production company to go along with its Android operating system, but was the price to high? Motorola was able to negotiate the purchase price to $40 per share, but without any bids from other companies how does management know that another company would have offered more? With shares trading down in the mid $20 range before the news of the acquisition, it is easy to say that shareholders of MMI are easily the real winners.
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