KFDA - NewsChannel 10 / Amarillo, TX: newschannel10.comOn2 to settle suits challenging purchase by Google

On2 to settle suits challenging purchase by Google

CLIFTON PARK, N.Y. (AP) - Video-software company On2 Technologies Inc. said Monday it settled several lawsuits by shareholders who had challenged On2's purchase by Google Inc.

On2's digital-video-compression technology may help Google cut costs for its video-sharing site YouTube, as it can shrink files, making them easier to send.

In August, On2 agreed to a takeover by Google in a deal valued at about $106 million. On2 shareholders later filed lawsuits against On2 in New York and Delaware, claiming On2 directors agreed to a deal that undervalues their shares. The shareholders also argued that the deal doesn't give them a significant premium in return for the change in control. The lawsuits had sought class-action status.

As part of the settlement agreement, On2 said it agreed to release more information to shareholders.

The Clifton Park, N.Y., company said it agreed to the settlement to minimize litigation costs.

Google, based in Mountain View, Calif., also had been named as a defendant in the lawsuits but it is not participating in the settlement.

The agreement, which was reached on Friday, needs to be approved by the Delaware Court of Chancery and the New York State Supreme Court.

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