This one’s a bit old, so apologies if we’re the last ones to know.
But in a late April article about Apple, Bloomberg noted that Eric Schmidt had been so desperate to win the AdMob bidding war over Apple that he agreed to an astounding $700 million kill fee if the deal failed to go through.
This came up at the shareholder meeting today, when a shareholder, understandably, asked whether Google had actually agreed to this.
Eric Schmidt didn’t answer the question. He just said he was confident the deal would be approved.
And the deal should be approved. But the way the FTC is acting (crazy), it may not be approved. Which means Google could be out $700 million of cash for nothing.
And more to the point: A $700 million kill fee on a $750 million purchase price is basically unheard-of. If Google agreed to a $700 million kill fee, it absolutely should have told shareholders about that the moment it announced the AdMob deal.
(Scott Cleland shreds Google for its failure to disclose the kill fee here).