Fair Price Amendment

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.

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Fair Price Amendment

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 amendment mandates that acquiring companies must pay all shareholders the same amount per stock in multi-tiered shares. The fair price amendment exists both to protect shareholders and to discourage hostile acquisitions by making them more expensive. See also: Antitakeover measure.