Mobile Insight

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More On The Acquisition

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A couple of interesting things related to acquisition have emerged in the past couple of days.

Google had to significantly raise the amount it offered to get the deal done. From the reports it looks the negotiations took a lot longer than earlier reports seemed to indicate. Also contrary to earlier speculation that only Page and Jha were involved in the negotiations it appears that Rubin was the instigator. One can never under-estimate personal dynamics. After all, Rubin and Jha have had a close and fruitful working relationship for a while, going back to Jha’s days at Qualcomm.

Andy Rubin, who oversees Google’s mobile operations, made the first contact with Motorola Mobility CEO Sanjay Jha, in early July according to the documents. Later, Google CEO Larry Page and Nikesh Ahora, the company’s chiefbusiness officer, entered the talks.

After nearly a month of confidential discussions, Google offered $30 per share in an Aug. 1 letter to Motorola Mobility’s board. At the time, Motorola Mobility’s stock was hovering around $22 per share.

Motorola Mobility rejected the first bid and asked for $43.50 per share on the advice of Silicon Valley investment banker Frank Quattrone of Qatalyst Partners.

Google then suggested a price of $37 per share before finally agreeing to pay $40 per share on Aug. 9.

Google paid more for MMI than it has paid for all its previous acquisitions put together ($9.1B).

Sanjay Jha stands to gain around $66M when the deal goes through. Dan Maloney stands to gain around $16M.

Jha was hired by the old Motorola in 2008 to be co-CEO and guide its cellphone unit to independence. When the split from the rest of Motorola (now called Motorola Solutions) finally took effect in January, Motorola Mobility’s board granted Jha enough stock and options to give him 1.8 percent of the company, when fully vested. The grants are supposed to vest over several years, but they will vest immediately if the company is sold.

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Written by Varma Chanderraju

September 14, 2011 at 2:40 pm

Posted in Uncategorized

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