ⓘ Breakup fee

                                     

ⓘ Breakup fee

A breakup fee is a penalty set in takeover agreements, to be paid if the target backs out of a deal. The breakup fee is ostensibly to compensate the original acquirer for the cost of the time and resources expended in negotiating the original agreement. A breakup fee also serves to inhibit competing bids, since such bids would have to cover the cost of the breakup fee as well.

                                     

1. Reverse breakup fee

A reverse breakup fee is a penalty to be paid to the target company if the acquirer backs out of the deal, usually because it can’t obtain financing. Reasons for such fees include the possibility of lawsuits, disruption of business operations, and the loss of key personnel during the period when the company is "in play."

                                     

2. Notable examples

  • If Japanese corporation SoftBanks $20 billion bid to buy 70% of Sprint Nextel fell through, SoftBank would have had to pay a $600 million breakup fee. SoftBank completed the deal with Sprint and is no longer subject to the reverse termination fee.
  • As a result of the failed 2011 merger of AT&T and T-Mobile, AT&T will have to pay a reverse breakup fee of $3 billion in cash and $1–3 billion in wireless spectrum.
                                     
  • The breakup of the Bell System was mandated on January 8, 1982, by an agreed consent decree providing that AT T Corporation would, as had been initially
  • Fee was a Christian rock and contemporary worship band from Alpharetta, Georgia, United States named for the group s founder and front - man Steve Fee Fee
  • Sussex paid a 313 million breakup fee in advance, in case the deal fell through with 78 million of that used to pay the breakup fee to Pinnacle Entertainment
  • would have downgraded its credit rating. Dofasco paid ThyssenKrupp a breakup fee of 215 million. Dofasco s board recommended the latest Arcelor offer
  • stalking horse offer, the debtor can offer bidding protections such as breakup fees to its best bidder before the auction. These incentives enhance the value
  • 220 222 Rotary phone CPS also leases the following models released post - breakup manufactured by AT T Technologies, Lucent Technologies, or Advanced American
  • Pacific s breakup Knudsen and Mc Fee returned to The Doobie Brothers who had already reunited in 1987 Knudsen died in 2005 while Mc Fee continues to
  • Simple Kid, real - name Ciaran Mc Feely is an Irish - born solo musical artist. Simple Kid s approach to recording involved recording to an 8 - track cassette
  • Willie Green, Douglass White, and Ritzy Lee. By the end of 1957, with the breakup of the Dell - Vikings, Kripp Johnson returned to the original group, making
  • Nova Scotia. MacPhie, 1914, p. 135 The Breakup One of Pictou Academy s oldest traditions is The Breakup It is essentially a prom, but is rarely referred
  • lawyer s fees to get out of some of them. At the time of the breakup the band had a loyal fan club with thousands of members. Subsequent to the breakup of