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These include requiring a third party bidder to have a guarantee equivalent to the Fed guarantee in order for their bid to be recommended by the Bear board.
"Given the premium being paid by CAR and the robust process conducted by ZIP as stated on the conference call, we are placing a low probability on the emergence of a third party bidder," said Paul Coster, an analyst at JP Morgan Securities.
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This substantially levels the playing field for any third-party bidder if one now wants to bid.
For example, initial bidders are receiving expansive information rights that entitle them to know about every conversation with a third-party bidder.
The best-known type of lock-ups are termination fees payable if the deal is trumped by a third-party bidder.
Vice Chancellor Laster's opinion may bring hand-wringing and a large damages payment from K.K.R. and Barclays, but unless a third-party bidder emerges, this transaction is heading toward a close after a 20-day delay.
Most other deals that have employed it — including Thoma Bravo's $1.1 billion acquisition of Deltek, Bayer's $1.2 billion bid for Schiff Nutrition and Genesee & Wyoming's acquisition of RailAmerica — have provided for a longer period to allow a third-party bidder to emerge.
If you aren't available during the end of the auction, consider using a third-party bidder.
Lock-ups are devices intended to protect a deal from third-party bidders.
And transactions initiated by third-party bidders were associated with premiums that were 12.8 percent higher, on average, than those initiated by management.
And in both instances, special mechanisms were eventually put in place to entice third-party bidders, including lowering or eliminating the termination fee typically payable to the initial bidder if a third-party bid succeeded.
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