Google's acquisition of video compression firm On2 Technologies is being challenged in court by On2 shareholders...
dissatisfied by Google's $106.5m offer.
The class action lawsuit filed in the Delaware Chancery Court seeks a permanent injunction against the deal, according to the New York Post.
Google announced plans to acquire On2 earlier this month in a cash and stock deal to boost its online video capabilities.
The agreement states that each share of On2 will be exchanged for 60 cents' worth of Google common stock, but shareholders say On2's stock traded at 65 cents in May.
The disgruntled shareholders also allege that On2's board agreed to provisions that prohibit the company from considering other offers.
The deal, which is expected to close in the fourth quarter of this year, still needs the approval of On2 shareholders, but the board has yet to announce a date for the vote.