freeze out provision

Freeze Out Provision

In an acquisition, a provision in a charter allowing the acquiring company to buy out all minority shareholders in the target company for a fair price for a limited period of time. The freeze out provision usually lasts from two to five years following the acquisition.

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freeze out provision

A clause in a corporate charter that permits an acquiring firm to buy the shares of noncontrolling stockholders at a fair price after a specified period of time, generally two to five years.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.