Series 79 practice questionmediumDeal Protections
A no-shop clause restricts a target company from soliciting competing bids. Which of the following is NOT typically an exception to a no-shop clause?
- AResponding to an unsolicited bona fide superior proposal
- BCommunicating with shareholders regarding the existing transaction
- CEngaging with regulatory agencies
- DSoliciting offers from potential competing bidders after agreement signing✓ Correct answer
Explanation
Why D — Soliciting offers from potential competing bidders after agreement signing
No-shop clauses generally prohibit the target from soliciting competing offers post-agreement, though exceptions may exist for unsolicited superior proposals. Allowing solicitation would undermine the clause's purpose.
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