breakup fee

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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If Chevron doesn't make an offer, or if its revised proposal is rejected, Anadarko must pay Chevron a $1 billion breakup fee.
Accordingly, Rent-A-Center notified Vintage Capital of Rent-A-Center's termination of the deal and noted Vintage Capital's obligation under the terms of the deal to pay the company a reverse breakup fee of USD 126.5m within three business days.
Bloomberg reports the breakup fee on the deal with Blackstone, should LaSalle choose to terminate it, is $112 million, according to a LaSalle regulatory filing.
This comes a day after CNBC reported that Amazon not only offered to buy a majority stake in the company but also offered a breakup fee of $2 billion and a non-compete.
Interestingly, Amazon too has formally submitted an offer to acquire 60 percent controlling stake in Flipkart, along with offering a $2 billion breakup fee as a means of convincing Flipkart to discuss the offer.
It added, "Broadcom has promised to pay a breakup fee of $8 billion in the event regulators thwart the deal, as well as a "ticking" fee of 6 percent per year on the cash portion of the consideration if the deal takes more than 12 months to close."
Disney will owe Fox a $2.5 billion breakup fee if its unable to get regulatory approval for the deal, according to a filing Thursday.
WBA also agreed to pay Rite Aid a breakup fee of $325 million.
That buyer, however, will have to be someone with a license to run an assisted living facility, according to the filing, and will have to pay at least $300,000 more, with Northbridge getting $250,000 of that as a breakup fee for its trouble.
The deal agreement may free Anthem from having to pay an antitrust-related breakup fee if Cigna committed a willful breach of the agreement terms.
Shareholders can vote against the deal, triggering a breakup fee of about $10 million.
Baker Hughes sought to reassure investors by announcing a $2.5 billion plan to buy back stock and pay down debt, using the breakup fee it will receive following the collapse of its long-stalled takeover by fellow oilfield services provider Halliburton.