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 This material may not be published, broadcast, rewritten or redistributed.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: BlackBerry courts iPhone users with cash

add to favorites email to friend print save as pdf

Related Stories

Recommended for you

Netflix sues Yahoo CIO for alleged kickbacks

2 hours ago

Netflix is suing a former company vice president who is now chief information officer at Yahoo, accusing him of receiving money from vendors he hired to work with the video streaming company.

BlackBerry courts iPhone users with cash

22 hours ago

Canadian smartphone maker BlackBerry is wooing Apple customers with a cash offer for trade-ins of iPhones for its new square-screened, keyboard-equipped Passport.

HP earnings show continued struggle

23 hours ago

Venerable tech giant Hewlett-Packard has been struggling for three years to turn its business around. Its latest earnings show it still has more work ahead.

Apple market value hits $700 bn

Nov 25, 2014

A rise in Apple shares Tuesday pushed the market value of the trend-setting US tech icon above $700 billion, becoming the first company to hit that milestone.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.