Mountain View, California — Squeaky wheels may get a little grease, following Mountain View, Calif., search giant Google’s acquisition offer to video bandwidth reducer On2 in August, has been with an extra $26.5 million for their trouble. The Mountain View search giant said it raised the offer for the online video compression company to around $132 million, up from about $106 million.
As we reported last August, Google originally planned to acquire On2 for 60 cents per share (or $106.5 million in all). But later On2 presented its best quarterly financial report in more than a year, and shareholders were unable to justify that any company other than Google had been given a chance to bid on it.
Even though, so many shareholders balked, now the deal is being revamped to address On2’s value. Google sweetened the pot as the its own stock has gone up since August, to the tune of 15 cents per share, adding up to around $26.5 million. It said the company will give additional cash per share to its investors, and the increased price represents its final offer. According to Google:
Under the revised terms, each outstanding share of On2 common stock will receive 0.0010 of a share of Google Class A Common Stock for each share of On2 common stock, as previously announced by On2 and Google, plus an additional $0.15 per share in cash consideration.
“By raising the consideration offered to On2’s stockholders by an additional $0.15 per share in cash, On2’s stockholders will receive additional value for their On2 common stock that Google and On2 regard as better reflects the value that On2’s stockholders would have received had the acquisition closed closer to the time of its announcement in August 2009,” the companies said in a statement. “This increase in the consideration that Google is offering to On2’s stockholders constitutes Google’s final offer.”
The acquisition would help Google boost its online video distribution and would able to maintain low cost and wide open, as consumers increasingly view media over devices like cell phones and set-top boxes, said Andrew Frank, research vice president at Gartner, when the deal was first announced in August.
“By owning this piece of infrastructure and perhaps others like it, they can ensure that the future of online video distribution is hospitable to platforms like Android and Chrome,” he said, referring to Google’s smart phone and PC operating systems.
Regardless, On2’s board of directors has approved the amended merger and has asked its shareholders to approve the proposal during a special meeting on February 17. The companies had hoped to complete the acquisition in 2009.