A new regulatory filing released Tuesday is revealing all the juicy details of last month’s Google-Motorola deal — like how Google ended up paying billions more than it had anticipated, despite the absence of competing bids.
The filing reveals how, in the wake of Google’s failed bid for Nortel’s patent portfolio, the company’s senior vice president of mobile Andy Rubin reached out to Motorola Mobility CEO Sanjay Jha to discuss Motorola’s patents. The proposed patent acquisition soon turned into takeover talks.
On August 1, Google came in with a $30 a share offer. But Motorola’s financial advisors, Qatalyst Partners, led by Frank Quattrone, urged the company to go higher. So four days later, Motorola rejected the $30 offer and asked instead for $43.50 a share.
Google returned on August 9 with a $37 a share offer, which was again rejected by Motorola, which dropped its asking price to $40.50. Finally, on the morning of August 15, the two companies agreed to a price of $40 per share—a 60 percent premium on the current value of shares—adding about $3 billion to Google’s original offer, and bringing the total price of the deal to $12.5 billion.
Towards the end of the negotiation process, Motorola’s board considered opening up the deal to other bidders, according to the filing. But it decided to work exclusively with Google because it believed a public auction wouldn’t bring a better price and a failed attempt at a sale would be “highly detrimental” to the company.