GREY:STPJF - Post by User
Post by
ticket2rideon Jun 03, 2014 11:25am
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Post# 22624802
Break Up Fee
Break Up FeeBefore there is a break up fee , there needs to be a deal.
The chances of there being a deal in place that includes a break up fee without shareholders knowkedge and ability to vote on said deal is slim no none ...
Remember Shareholders own the company not Management , although it may not seem like it at times , they actually do work for the Owners (Shareholders).
(not a fan of this plan but) if Brion were to make an offer there would be no exchanged shares as BRION is not a public company but rather a joint venture of 2 other public companies. you would only get the cash...
Definition - What does Break-up Fee mean?
A break-up fee is paid in an acquisition by the party that decides not to pursue the deal. The break-up fee can be paid to either the buyer or the seller. A seller may ask for a break-up fee if not completing the deal would have a negative consequence on the seller, if the sales process is disruptive to the operation of the business, or when the seller has been approached with an unsolicited offer. A break-up fee offered in the letter of intent will show the buyers commitment to completing the acquisition.
Similarly, a buyer will ask for a break-up fee if the seller has the option to shop the deal to other buyers. The break-up fee paid to a buyer will be a reimbursement for transaction costs incurred if the deal does not close due to the seller's actions.
Break-up fees can range from 1-3% of the total deal value.
T2R