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Go-Shops in Canada

Go-Shop Provisions in Canadian M&A Transactions: Advantages, Disadvantages and Considerations

Posted in Contractual Matters, Public M&A

It is quite common in negotiated acquisitions for companies to perform a pre-signing market canvass and to enter into an acquisition agreement that contains a “no-shop” provision with a fiduciary out clause for unsolicited third-party proposals, as well as a break fee payable in the eventuality of the target company accepting a superior offer.  Less common is the practice of foregoing the pre-signing market canvass and combining a “go-shop” provision that allows the target company to actively solicit superior proposals for a specified period of time after entering into the acquisition agreement with a two-tiered break fee that provides for … Continue Reading