On2 vows to fight challenges to Google acquisition

Aug 13, 2009

(AP) -- Video software firm On2 Technologies said it will fight legal challenges to its planned acquisition by Google Inc.

The New York-based company agreed last week to a takeover by Mountain View, Calif.-based in a deal valued at about $106 million, with shareholders receiving 60 cents worth of Google shares for each share of On2 stock.

But On2 shareholders filed separate lawsuits in Delaware and New York seeking class-action status this week, alleging that On2 directors breached their fiduciary duties. They claim the directors agreed to a deal that undervalues their shares and doesn't give them a significant premium in return for the change in control.

A Delaware lawsuit alleges, among other things, that On2 officials announced the deal one day before On2 reported its best quarterly performance in 18 months.

The shareholders also say there is little evidence that On2 directors tried to shop around for a better offer and instead agreed to burdensome deal protection measures, including a $2 million termination fee.

On2 makes digital video compression technology that could give Google a way to cut costs for its popular video-sharing site YouTube. The technology can help shrink video files so they can be sent more easily across the Web.

Such compression is important given that YouTube users upload some 20 hours of footage per minute; by shrinking the files, YouTube needs to buy less bandwidth from Internet access providers.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Airbnb rental site raises $450 mn

add to favorites email to friend print save as pdf

Related Stories

Recommended for you

Ex-Apple chief plans mobile phone for India

12 hours ago

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Apr 19, 2014

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

US venture investments highest since 2001 (Update)

Apr 18, 2014

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

User comments : 0

More news stories

Ex-Apple chief plans mobile phone for India

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

A homemade solar lamp for developing countries

(Phys.org) —The solar lamp developed by the start-up LEDsafari is a more effective, safer, and less expensive form of illumination than the traditional oil lamp currently used by more than one billion people ...

UAE reports 12 new cases of MERS

Health authorities in the United Arab Emirates have announced 12 new cases of infection by the MERS coronavirus, but insisted the patients would be cured within two weeks.

NASA's space station Robonaut finally getting legs

Robonaut, the first out-of-this-world humanoid, is finally getting its space legs. For three years, Robonaut has had to manage from the waist up. This new pair of legs means the experimental robot—now stuck ...