Stock-sale or asset-sale offer by a takeover-target firm to a friendly acquirer (the white knight) to frustrate a hostile acquirer (the black knight). This offer for the sale of the major assets (the crown jewels) or controlling shares is attractively priced but freezes (locks-up) the assets or shares so that they cannot be resold without the target firm's approval. Since this strategy may hinder fair bidding, courts often disallow it except in cases where it encourages greater competition among bidders. It is not considered a derivative instrument since its primary underlying is the occurrence of a business combination and is therefore not subject to Financial Accounting Standards Board (FASB) statement 133. also called lock up agreement, lock up clause, lock up defense, lock up provision.
Related information about lock-up option:
- Lock-Up Option Definition | Investopedia
A stock option offered by a target company to a white knight for additional equity or for the purchase of a valuable portion of their company.
- What is lock-up option? definition and meaning
Definition of lock-up option: Stock-sale or asset-sale offer by a takeover-target firm to a friendly acquirer (the white knight) to frustrate a hostile acquirer (the black ...
- Lock-Up Option: Definition from Answers.com
In corporate takeovers, option granted by a target to a friendly suitor to acquire the targets crown jewels when there is a hostile suitor on the scene.
- Lock Up Option Law & Legal Definition
Lock up option is a stock-sale or asset-sale offer by a takeover-target firm to a friendly acquirer (the white knight) to frustrate a hostile acquirer (the black knight).
- lock-up option - The Free Dictionary
Noun, 1. lock-up option - an option to buy the crown jewels offered to a white knight in order to forestall a hostile takeover. option - the right to buy or sell property ...
- Lock-Up Options - Financial Dictionary - The Free Dictionary
lock-up option · lock-up option. Lock-Up Options. Lock-up period · Lock-Up Periods · lock-up relay · Lock-ups · Lock-weir · Lock/Write/Delete/Unlock · lockable ...
- Down but Not Out--The Lock-Up Option Still Has Legal Punch when ...
lock-up option, a device by which the target company induces a friendly .... lock- up option as a negotiating tool, a target board may increase the number of ...
- What is LOCK-UP OPTION? - The Law Dictionary
Definition of LOCK-UP OPTION: When a company allows a white knight to purchase its most valuable assets to prevent a hostile takeover.