Which of the following best describes a no-shop clause?
A)The target firm agrees not to find another buyer, demonstrating its commitment to completing the transaction.
B)The acquiring firm agrees not to find another target, demonstrating its commitment to completing the transaction.
C)Once a potential acquirer makes an offer; no other buyers can make a bid for the target firm.
D)All of the above.

Question

Quizplus · Accepted Answer

A no-shop clause is a provision in a merger or acquisition agreement that prevents the target company from seeking other buyers or negotiating with other parties after accepting an offer from the acquiring firm. It is designed to ensure that the deal goes through as planned and that the acquiring firm's due diligence and investment in the acquisition are not wasted. Therefore, option A accurately describes a no-shop clause, while options B and C are incorrect.

Which of the Following Best Describes a No-Shop Clause