Finance: What is a standstill agreement?

A standstill agreement refers to a lessening of hostilities... to avoid a hostile takeover. Or a...hostel takeover, for all you horror buffs.

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Transcript

00:21

of the shares outstanding of blinky pinky and inky inky

00:26

and in most companies given that half or more of

00:29

the shares never even vote in a proxy contest that

00:32

seventeen percent is almost enough to control the company by

00:36

electing its own slate or board of directors So instead

00:39

of there being ah hostile takeover while the company usually

00:42

agrees to meet with pac man here walk a walk

00:45

up and negotiate a strategy or terms to better run

00:48

the company than it had been in the past and

00:50

note that hostile takeovers generally on ly happen when the

00:54

target company this guy being eaten has been poorly run

00:58

for a long time and has on ly dubious shareholder

01:02

support like trying to do ah hostile with amazon or

01:05

facebook or google or netflix these days even if they

01:08

didn't have founder super voting stock while the stocks have

01:11

done so well that there'd be no support for upsetting

01:14

the apple cart in these winners because they won so

01:17

much in stock appreciation for their investors And yes that

01:21

applies to apple is well So are you not leaving

01:23

you out there People Well once it's been agreed upon

01:26

then generally speaking there would be a standstill agreement put

01:30

in place that is packman here would stand still from

01:34

his hostilities You know like we do just stand here

01:37

still and stop buying more shares beyond his seventeen percent

01:40

that's What that stands still agreement would do it stopped

01:43

by a standstill on his seventeen and hopefully the company 00:01:46.246 --> [endTime] Well no get back on course