Buy Out

buy out

1. To purchase all the stock of a company or all the stock of a company owned by one investor or by a group of investors. For example, corporate management may decide to buy out an investor in order to halt a potential takeover.

2. To terminate a contract before its scheduled termination date by reaching a monetary agreement satisfactory to the parties involved.

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Buy Out

1. To buy all the stock in a publicly-traded company owned by a single investor or group of investors. For example, a company may buy out a certain investor group if it believes the group intends to attempt a hostile takeover. This often occurs at a premium to the market price per share. See also: Greenmail.

2. In a partnership, to buy one or more partners' equity in the company. Another partner may do this, or an outside investor may do so.

3. The act of one party ending a contract before its scheduled expiration date by paying another party a certain amount of money so that all parties are satisfied. This may occur when the contract no longer benefits one of the parties; he/she may buy out the contract for a large, up-front payment that is nevertheless smaller than the amount he/she would have lost had the contract remained in effect.