Reverse break fees to increase, in US

Author: | Published: 1 Oct 2009
What’s good for the goose...

Reverse break fees in US M&A transactions are likely to triple in the near future. But the trend is unlikely to spread to Europe.

When reverse break fees were first drafted, they were pegged to the forward fee of around 3%. In one private equity lawyer's words, "what was good for the goose was good for the gander".

However, in being so low, they were not a sufficient deterrent for purchasers to walk away. Now that companies in liability management need stronger assurances that deals...