M&A
No-Shop Clause
Definition
A provision barring a target from soliciting or negotiating rival offers once an acquisition is signed, subject to a fiduciary carve-out allowing its board to respond to an unsolicited superior proposal.
Why it matters
A no-shop is what a buyer gets in return for committing to a price. Having signed, it wants certainty that the target will not use the agreement as a stalking horse to run an auction it did not have to pay for. The clause therefore prohibits solicitation, information-sharing and negotiation with anyone else, and requires the target to notify the buyer if an approach arrives.
The fiduciary carve-out is what stops the clause becoming absolute, and it is the part that matters in practice. A board cannot contract away its duty to shareholders, so the agreement allows it to engage with an unsolicited proposal that is, or could reasonably lead to, a superior proposal, usually with matching rights for the incumbent buyer and a break fee if the target ultimately switches. Where a go-shop period exists it sits before the no-shop begins: the target may actively solicit for a defined window, and only then does the restriction bite. Reading the two together tells you how contested a deal really was. Caesars Entertainment ran a 45-day go-shop in 2026, which produced a higher bid the board then declined on deliverability grounds, an outcome the no-shop period made public in the proxy rather than concealing.
The bottom line
The no-shop buys certainty for the buyer; the fiduciary carve-out is the shareholders’ escape hatch. Neither is meaningful without the other.