Series 79 practice questionmediumDeal Protections
Which of the following is true about matching rights in a public company merger agreement?
- AThey always allow the buyer to unilaterally improve its bid after deal signing.
- BThey require the target to accept any improved bid by the original buyer.
- CThey entitle the target to shop the deal at any time.
- DThey give the original buyer the opportunity to match a superior proposal before the target accepts it.✓ Correct answer
Explanation
Why D — They give the original buyer the opportunity to match a superior proposal before the target accepts it.
Matching rights grant the initial buyer a chance to match a superior offer, but do not obligate the target to accept. Assuming these rights are absolute or always allow shopping is a common misunderstanding.
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