Re:Sprint and T-Mobile Agree on Terms of $32B Deal
by jessriedel on Wednesday June 04, 2014 @08:49PM
(#7849483)
Can only explain the business reasoning surrounding breakup fees? Why does one company stand to lose more or less than another one if things don't go through? Why is the merger worth more to one than the other?
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Re:Sprint and T-Mobile Agree on Terms of $32B Deal
by rogerbinns on Wednesday June 04, 2014 @09:36PM
(#7849682)
It is distracting to the target and will require them to do lots more work. For example they will need to provide the materials necessary for due diligence. The fee ensures the acquirer is serious, and that the target is adequately compensated if it doesn't go through.
The acquirer also makes it harder for others to bid because they too need to take into account the fee.