fair price amendment

Fair Price Provision

A provision in the bylaws of some publicly-traded companies stating that a company seeking to acquire it must pay a fair price to targeted shareholders. The formula for determining a fair price may be indicated in the bylaws; it is often a calculation based on historic prices. Additionally, the fair price provision mandates that the acquiring company must pay all shareholders the same amount per share in multi-tiered shares. The fair price provision exists both to protect shareholders and to discourage hostile acquisitions by making them more expensive. See also: Antitakeover measure.

fair price amendment

An addition to a company's bylaws that prevents an acquiring firm or investor from offering different prices for the shares held by different stockholders during a takeover attempt. The amendment tends to discourage takeover attempts by making them more expensive. See also appraisal right.
References in periodicals archive ?
Finally, the fair price amendment requires that the bidder pay a "fair" price for all purchased shares.
Furthermore, a comparison of nonfair price and fair price amendments shows no significant differences from industry means for capital spending.
We examine fair price amendments and nonfair price amendments separately, because the categories may provide a different degree of job protection for managers.