Lock-Up Creep

Abstract

In recent years, the number and type of merger agreement lock-ups have significantly increased, a phenomenon we term "lock-up creep". Not only have new lock-ups arisen, but the terms of these lock-ups have become ever-more negotiated, intricate and varied. This article analyzes the causes of lock-up creep and assesses lock-up creep’s effect on the takeover market. The article was prepared for and presented at The Journal of Corporation Law symposium: Ten Years After Omnicare: The Evolving Market for Deal Protection Devices held at The University of Iowa College of Law.

Keywords: takeovers, Delaware, merger agreements, lock-ups, deal protection devices, termination fees