The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Mon, 10 Aug 2026 13:46:45 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.9 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Go-Shops With Matching Rights: Reimbursing Topping Bidders – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Go-Shops With Matching Rights: Reimbursing Topping Bidders https://corpgov.law.harvard.edu/2007/05/21/go-shops-with-matching-rights-and-reimbursing-topping-bidders/?utm_source=rss&utm_medium=rss&utm_campaign=go-shops-with-matching-rights-and-reimbursing-topping-bidders https://corpgov.law.harvard.edu/2007/05/21/go-shops-with-matching-rights-and-reimbursing-topping-bidders/#comments Tue, 22 May 2007 03:55:35 +0000 http://blogs.law.harvard.edu/corpgov/2007/05/21/go-shops-with-matching-rights-and-rei?d=20150122115810EST Posted by Mark A. Morton, Potter Anderson & Corroon LLP (Delaware), and Lawrence Hamermesh, Widener University School of Law, on Tuesday, May 22, 2007
Editor's Note:

We’re pleased to host the following dialogue between Mark Morton of Potter Anderson and Corroon and Larry Hamermesh of Widener Law School, precipitated by Mark’s ruminations about sellers’ insistence that a go-shop provision with a matching right in a merger agreement be accompanied by a right to reimburse the expenses of a topping bidder who is subsequently matched.  As always, we welcome reader comments on the discussion below.

Mark Morton: In the typical M&A deal, there’s generally a match right.  As a result, the target can’t actually terminate the merger agreement for the superior proposal until the first bidder decides whether or not to match.  If the first bidder matches, he wins (unless he’s topped again).  In that case, the target will not have signed a merger agreement with the interloper, so the interloper doesn’t get a termination fee.  As a result, the interloper gets nothing for his superior bid–other than a large chunk of unreimbursed expenses.  I would argue, therefore, that the presence of a match right creates a significant disincentive to topping bids.

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