Part one of this series explored the interplay between the counterparties once a business combination has been agreed upon and provided an overview of deal protection mechanisms available to both target and bidding companies.

Part two of this series explores how to craft a deal protection package that delivers the right tension of protection, while adhering to the various regulatory and legal constraints to a business combination.

There is no definitive catalogue of deal protection mechanisms, because the term describes a class of mechanisms that are both fluid and flexible. Several devices, such as no-shop, confidentiality and break fees have emerged as standard in business combination transactions, whereas other, more exotic deal protection mechanisms have been deployed with varying degrees of success.

No-shop provisions (commonly used in Bermuda) principally seek to prevent a target company from soliciting or encouraging third-party proposals. These provisions vary from a less restrictive clause that permits the target company to provide information to unsolicited bidders, to the much more restrictive “no-talk” covenants that prohibit the target company from responding to any third-party advances.

Share
Twitter LinkedIn Email Save as PDF
More Publications
27 Jun 2022

Insurtech ILS and the New Normal

As Bermuda and the global markets with which the Island transacts move towards the so-called  ‘ne...

Contributors: Josephine Noddings
23 Jun 2022

Digital Assets in a Crypto Winter

In 2013, IT engineer James Howells was cleaning out his house. He had two identical hard drives: one...

Contributors: James Batten
22 Jun 2022

Bloomberg Tax Country Guide: Bermuda

Bloomberg Tax Country Guides provide overviews of the tax regimes of more than 200 jurisdictions. Th...

Contributors: Ashley Bento
9 Jun 2022

Bermuda’s long-term re/insurance landscape

Bermuda’s long-term re/insurance market has grown considerably in recent years. The island now has...

2 Jun 2022

Provisional Liquidation In Bermuda

Provisional liquidation in Bermuda is a distinctive, flexible regime that operates to support compan...

Contributors: James Batten
23 May 2022

The good life: Bermuda’s new economic pillar

The life sector has moved swiftly from being a new ‘nice-to-have’ in the Bermuda marketplace, to...

5 May 2022

Restructuring of (Re) Insurers during Covid-19

Restructuring involves changing the financial, operational, legal or other structures of a business ...

28 Apr 2022

Assignment, novation or sub-participation of loans             

Transfers of loan portfolios between lending institutions have always been commonplace in the financ...

21 Apr 2022

Defining digital assets in insolvency proceedings

It has been more than a decade since the creation of the first cryptocurrency, bitcoin, yet digital ...

Contributors: James Batten
7 Apr 2022

Funds: filing requirements and Integra

Investment funds registered, authorised or designated under the Investment Funds Act 2006 have ongoi...