GO SHOP Meaning and
Definition
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The term "go shop" is a business phrase used to describe a period of time granted to a company, usually in the context of a merger or acquisition, during which they are allowed to actively seek out and entertain offers from other potential buyers. It refers to the process of exploring alternative acquisitions or competitive bids to potentially surpass the existing offer on the table.
This provision is typically included in merger agreements to protect shareholders' interests by ensuring that the company's management fulfills their fiduciary duty to obtain the best possible deal. The go-shop period, which usually lasts for a specified duration stated in the agreement, allows the target company to actively solicit other potential buyers and consider alternative proposals.
During the go-shop period, the target company may engage in various activities, such as contacting potential acquirers, conducting discussions, and sharing non-public information to evaluate potential alternative transactions. However, they must still adhere to confidentiality and legal requirements.
The go-shop provision serves as a safeguard against potential undervaluation or inadequate offers. It enables the target company's board of directors to ascertain whether better options are available in the market and provides an opportunity for competing bids that may potentially benefit shareholders.
In conclusion, "go shop" refers to an allocated period when a company can actively seek out alternative offers or competitive bids, typically in the context of a merger or acquisition, to safeguard shareholder interests and potentially achieve a more favorable deal.
Etymology of GO SHOP
The word "go shop" is a colloquial phrase that has its roots in the English language. The etymology of "go shop" can be understood by analyzing the individual words:
1. Go: The word "go" is derived from the Old English word "gān", which means "to proceed" or "to travel". It has remained relatively unchanged in its meaning and usage over time.
2. Shop: The term "shop" comes from the Middle English word "shoppe" or "schoppe", which originally referred to a small booth or temporary structure where goods were sold. The word is also influenced by the Anglo-Saxon word "sceoppa", meaning "booth" or "stall". Over time, "shop" came to denote a permanent establishment where goods are sold.
