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Breakup Fee

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Breakup Fee
In some agreements, a fee that a seller must pay a buyer if the seller decides not to close the deal. The seller usually does this if it receives a better bid from another buyer after it has already entered negotiations. The breakup fee exists to compensate the first buyer, who has no control over the change in situation. It is usually 1-3% of the sale price. See also: Topper fee.

breakup fee
A provision in a takeover agreement that requires a firm to pay the investment banker a large sum of money if another firm takes over the target company. A breakup fee tends to discourage other firms from making bids for the target. See also topper fee.


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The company is still seeking a $66 million breakup fee from Bain Capital Partners, which pulled out of a $2.
Sallie will drop its $900 million lawsuit over the breakup fee.
The transaction includes a breakup fee of up to $12 million to Behringer Harvard if under certain conditions the transaction should not close.
 
 
 
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