Google reached an agreement to buy the company in August, hoping to use On2’s video compression technology to cut costs at its YouTube video sharing site. But On2 shareholders balked at the price.
The company said last month that it failed to collect enough shareholder support for the deal. On2 has had to fend off shareholder lawsuits over the purchase price.
Google says it will give On2 stockholders an extra 15 cents in cash for every On2 share they hold in addition to the original offer of about 60 cents worth of Google shares.
In premarket trading, On2 shares rallied to 74 cents from a close of 59 cents.