| lock-up option | |
noun | |
| an option to buy the crown jewels offered to a white knight in order to forestall a hostile takeover |
Lock-Up Option
A stock option offered by a target company to a white knight for additional equity or for the purchase of a valuable portion of their company.
Investopedia Commentary
An undesired third party is deterred from acquiring a major portion of the target company due to the very high value of the lockup option.
Also known as Lock-Up Defense.
See also: Crown Jewels, Hostile Takeover, Lock-Up Agreement, Merger, Shark Repellent, White Knight