No Shop. Neither the Seller, nor any agent, employee, officer, director, trustee or any representative of any of the foregoing will, during the period commencing on the date of this Agreement and ending with the earlier to occur of the Closing Date or the termination of this Agreement in accordance with its terms, directly or indirectly, solicit or initiate the submission of proposals or offers from any person or entity for, participate in any discussions pertaining to, or furnish any information to any person or entity other than the Purchaser or the Purchaser’s authorized agent, relating to any acquisition or purchase of all or a material amount of the assets of, or any equity interest in, the Seller or any merger, consolidation or business combination of or involving the Seller.
Protecting Your Purchase of a Business from Other Bidders; The “No Shop” Clause
March 1, 2023by Jeffrey Davis
What is a “no shop clause”? It’s a covenant or provision in a merger or acquisition agreement that restricts the target company or seller from soliciting or accepting competing bids from other potential buyers. It is a common deal-protection device used by buyers to increase the certainty of closing and protect their investment of time, money, and resources. It also prevents bidding wars or unsolicited bids from trumping your position as the potential buyer.
A No Shop Clause looks like this:
