Topping Bid
A competing M&A offer that exceeds the price of an already-signed merger agreement, submitted before the original deal closes. Topping bids can come from competing strategics, financial sponsors, or activist investors. The original bidder typically has matching rights (3-5 business days to match the topping bid); if the original bidder declines to match, the target board pays the original a break fee and switches to the topping bidder. Topping-bid success is structurally easier for strategic acquirers with synergy headroom than for financial sponsors with constrained standalone returns.
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Related terms
Ambiguity Aversion · Anchored Assumption · Asset Beta · Bank ROE Spread · Banker Pitch Deck · Beta
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