Fair price provision - Definition

A business law that mandates an 80% vote to approve certain business transactions so that it protects existing shareholders from hostile takeovers in which an acquirer buys a substantial voting interest and then acquires the remaining shares in a coercive merger where it pays an Amount lower than the Fair value for the remaining shares is referred to as fair price provision. This price is usually computed as a multiple of the target firm's price-to-Earnings or PE ratio, price to sales or price to cash flow. Additionally, the fair price provision mandates that the acquiring company must pay all shareholders the same amount per share in multi-tiered shares. However the fair price provision can be annulled by the target firm's board of directors upon a super-majority decision.



Terms near "Fair price provision"

Fair rate of return
Fair rental value coverage
Fair tax
Fair trade
Fair trade investing
Fair value
Fair value hedge
Fair weather fund
Fairly valued
Fairness opinion
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