Lock-Up Option

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DEFINITION of 'Lock-Up Option'

A stock option offered by a target company to a white knight for additional equity or for the purchase of a valuable portion of their company.

INVESTOPEDIA EXPLAINS 'Lock-Up Option'

An undesired third party is deterred from acquiring a major portion of the target company due to the very high value of the lockup option.

Also known as Lock-Up Defense.

RELATED TERMS
  1. White Knight

    A white knight is an individual or company that acquires a corporation ...
  2. Shark Repellent

    Slang term for any one of a number of measures taken by a company ...
  3. Lock-Up Agreement

    A legally binding contract between the underwriters and insiders ...
  4. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  5. Merger

    The combining of two or more companies, generally by offering ...
  6. Crown Jewels

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