NO-SHOP VS. GO-SHOP
The LOI often establishes a binding exclusivity through a “no-shop” provision. Once you’ve reached this point, you may want to ensure that the seller cannot try to find a better deal somewhere else. Occasionally, though, I’ve had buyers include a “go-shop” clause. This gives the seller a certain period of time (usually around fifty days) to see if he can find a better deal. One of the prime reasons to use a go-shop clause is to quell the dissent of minority shareholders who aren’t convinced that your deal is the best possible one out there. If, after fifty days, the majority owner comes back and informs them that there was no better deal, the rebellion stops.
Figure 11-3. A typical transaction timeline.
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