Originally Posted by kingsnake2
The patents are valuable no doubt, but not 12.5 Billion + a bloodsucking company valuable.
I have to think that google plans to "renovate" Motorola.
Well, for any acquisition, a premium above share price must be paid in order to appease the target company's Board of Directors and shareholders. Otherwise, the target has no incentive to be acquired.
Originally Posted by quakermaas
edit: aah it seems you are right
"That’s 63 percent more than Motorola Mobility’s closing price on the New York Stock Exchange on Aug. 12. "
"Google is paying a premium of 73 percent compared with Motorola Mobility’s 20-day trading average price before today."
Premiums in excess of 60% are not unheard of in the tech sector, and if Google has all that cash laying around that's just getting taxed to hell and back, why not spend it? You also have to factor in the investment bankers who were brought in to advise both companies. Obviously, the sell-side bankers (the guys advising Moto) are going to want to jack up the price as much as possible to please their clients and also make it rain for themselves (bankers get paid a percentage of the acquisition sum). The buy-side bankers (the guys advising Google) probably didn't fight very hard for a good price because it's pretty obvious that Google wants Moto's IP and Moto has all the leverage in these negotiations. Besides, like I mentioned before, Google has a ton of cash burning a hole in its pocket.
Anyway, Google was advised by Lazard and Moto was advised by Centerview Partners and Frank Quattrone's firm Qatalyst Partners. Frank Quattrone is a straight-up baller and has been a high-profile player on Wall Street for some time now. It's no surprise that a deal like this went down under his watch.
Originally Posted by lordikon
That is probably 90% of the reason behind this purchase. Seriously, patents on digital software are getting completely out of hand.
Pfft, more like 100% of the reason
.Edited by decimator - 8/15/11 at 11:50am