standstill agreement

Definition

A defense against a hostile takeover that involves the purchase of the raiding party's shares by the company targeted for acquisition. The targeted company pays a significant premium on the shares, effectively halting the takeover process by using the company's available cash.

Use this term in a sentence

The standstill agreement stopped the hostile takeover but it also used up most of the company's available cash in the process.

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They were really trying to avoid a hostile takeover so they decided go try and purchase some of the companies shares for a standstill agreement.

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Fearful of a hostile takeover, Flabco executives realized a standstill agreement was their best bet and quickly purchased a large amount of Kraptonic stock.

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