On2 Settles Litigation Over Sale To Google

Eliminating what had become a headache in the wake of its agreement to sell itself to Google (NSDQ: GOOG) for $106.5 million, video compression firm On2 has settled five shareholder lawsuits related to the deal. Several groups of investors had sued On2 in mid-August, alleging that management had not shopped the company around to get the best price and that it had sold at a discount to what it potentially could have been sold for. (A subsequent filing showed that On2’s board decided to negotiate exclusively with Google because of a concern that customers might “react negatively” if they learned On2 was for sale).

In a statement, On2 says it has agreed to provide “additional supplemental disclosures” about the deal. No word on whether any money also changed hands.

Google still hasn’t said exactly what it intends to do with On2, only saying that the acquisition will allow it to “keep improving video quality and delivery.” Asked about the deal during the company’s earnings call last week, CFO Patrick Pichette said additional details would have to wait until after the deal is closed. On2 shareholders still need to vote to approve it.