New Details Emerge in SEC Filing: Google Outbid itself Acquiring Motorola Mobility

Discussion in 'Android News' started by dgstorm, Sep 14, 2011.

  1. dgstorm
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    dgstorm Editor in Chief Staff Member Premium Member

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    According to the SEC filing documents released by Motorola Mobility yesterday, Google actually outbid itself by 33% when it purchased Motorola Mobility. Apparently, at first Google made an initial offer of $30 dollars per share for Motorola Mobility on August 1st. Then, on August 9th, Motorola requested a new bid target of $43.50, and Google raised their bid to $37 dollars per share. However, here's where they ended up tricking themselves into a larger bid. Later that same day, Google was worried that Motorola might be snapped up in a public auction, even though Motorola wasn't accepting bids directly from other firms, so just to be safe, Google upped their bid to $40 dollars per share. This resulted in them inadvertently out-bidding themselves by 33 percent, an increase of $3 billion dollars, resulting in the final price of $12.5 billion.

    Interestingly, the Wall Street Journal was able to shed some more light on the subject that delves even deeper into the real reason this deal was so important to both Google and Motorola. Here's a quote from the Engadget article with the details,
    It appears that both Google and Motorola were concerned that Motorola would become so weakened by all the legal battles, that they might be ruined or gobbled up by other companies. This was obviously a big deal to Motorola, but it was also important to Google, because Motorola helped pioneer the Android ecosystem. It would have been a dangerous thing for Android as a whole to let the legal battles put Motorola in the position of a hostile takeover. So, the ultimate solution was for Google to swallow up Motorola Mobility before someone else did, allowing Google to continue to support the Android ecosystem.

    Source: Engadget and Wall Street Journal and Bloomberg
     
  2. Tuktanuk
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    Tuktanuk Member

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    Maybe... just maybe.... $40.00 per share was the "buy it now" price on ebay. So, Google placed a bid then worried "OMG!!! what if someone else just comes in and pays the "buy it now" price!??? I better go adjust that real quick". end of story.
     
  3. Trusstopher
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    Trusstopher DF Super Moderator Staff Member

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    It was a # billion dollar insurance policy... I wonder if Google is thinking about all the money spent on the policy like I do after a year of paying health insurance and not using it in any way shape or form for the entire year...
     
  4. Mustang02
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    Mustang02 Senior Member

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    So why is this a big news item? Google agreed to pay it, MS agreed to it and the share holders get their money.
     
  5. Trusstopher
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    Trusstopher DF Super Moderator Staff Member

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    # = 3