Why is it called a reverse termination fee? What is a Reverse Termination Fee? A reverse termination fee is also known as a reverse breakup fee. It refers to the amount of money paid to the target company after the acquirer backs out of the deal or the transaction fails to complete.
What is payment break up? What Does Break-up Fee Mean? A break-up fee is paid in an acquisition by the party that decides not to pursue the deal. The break-up fee can be paid to either the buyer or the seller.
What is a break in fee? Break fees (also referred to as inducement fees or failure costs) are deal protection measures where a party to a transaction agrees to pay a fee to another party if the transaction fails due to the occurrence of a specified event.
What is an RTF in M&A? While buyers protect themselves via breakup (termination) fees, sellers often protect themselves with reverse termination fees (RTFs). As the name suggests, RTFs allow the seller to collect a fee should the buyer walk away from a deal.