On2 shareholders claim Google acquisition "unfair"

A week after Google announced an agreement to acquire video compression software and solutions developer On2 Technologies for $106.5 million, On2 shareholders are challenging the deal, alleging the price tag is "unfair." A complaint filed Monday in Delaware Court of Chancery seeks class action status and a permanent injunction blocking the deal, contending it undervalues On2 investors while benefiting executives, board members and staffers. According to the claim, On2 management and Google rushed to announce the agreement just a day before On2 reported its best quarterly financial results in six quarters: "Defendants agreed to such terms without any hard evidence that they sought a third-party buyer for On2 and no evidence that On2's directors shopped the company in order to obtain the best possible price," write investors Jack Miller and Paul Uy. On2 said it will fight the shareholder challenge.

On2 creates compression technologies that power desktop and mobile video applications. The firm's customers include Nokia, Adobe, Sun Microsystems, Skype, Sony and Brightcove.

For more on the On2 shareholder complaint:
- read this Wall Street Journal article

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