This document is a standstill agreement for a firm that considering merger with another firm. It assures that the status quo remains while the partners pursue various alternatives.
This document is a standstill agreement for a firm that considering merger with another firm. It assures that the status quo remains while the partners pursue various alternatives.
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An investor makes a purchase of shares in a company which brings their holdings to 45%. Concerned about the potential for a controlling share takeover by the investor, the company enters negotiations over a standstill, which prevents further purchasing beyond this point.
A standstill agreement is a contract that contains provisions that govern how a bidder of a company can purchase, dispose of, or vote stock of the target company. A standstill agreement can effectively stall or stop the process of a hostile takeover if the parties cannot negotiate a friendly deal.
A standstill agreement prevents a party from issuing proceedings during the currency of that agreement. As such a standstill agreement is a voluntary contractual arrangement between the parties to pause limitation for an agreed length of time (typically 3-6 months).
In a ?standstill clause? the parties to a trade agreement commit to keeping the market at least as open in the future as it was as at the time of conclusion of the agreement.
An agreement in which a hostile bidder agrees to limit its holdings in a target company. A standstill agreement stops the takeover bid from progressing for a period of time.
The standstill agreement prevents these potential buyers from publicly announcing a bid for the target, without first acquiring the consent of the target (the public company exploring a sale). In this sense, the standstill agreement is seen to help the target company control the bidding process.
A standstill agreement can effectively stall or stop the process of a hostile takeover if the parties cannot negotiate a friendly deal. A company that comes under pressure from an aggressive bidder or activist investor finds a standstill agreement helpful in blunting the unsolicited approach.