Opt-Out Vote

AAA

DEFINITION of 'Opt-Out Vote'

A shareholder vote that is undertaken in order to determine if certain laws and regulations regarding corporate takeovers are to be waived during a particular corporate action. An opt-out vote, if successful, will remove certain legal restrictions that would have prevented a corporate takeover from occurring, or allow the takeover to occur sooner than it otherwise would have.

INVESTOPEDIA EXPLAINS 'Opt-Out Vote'

Although corporate-takeover laws vary from state to state, they are typically structured to provide limits on the ability of acquiring shareholders to exert too much influence on takeover targets. For example, regulations typically require corporate takeovers or extensions of tender offers to obtain a supermajority of shareholder votes in order to be approved.

These regulations can be waived, however, if the target company decides to opt out of the regulatory coverage. This is done through an opt-out vote, which, in most cases, must be approved by the corporation's board of directors before it is successfully implemented.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Proxy Vote

    A ballot cast by one person on behalf of another. One of the ...
  3. Corporate Action

    Any event that brings material change to a company and affects ...
  4. Voting Right

    The right of a stockholder to vote on matters of corporate policy ...
  5. Supermajority

    A corporate amendment in a company's charter requiring a large ...
  6. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
RELATED FAQS
  1. If a company offers a buyback of its shares, how do I decide whether to accept the ...

    Tender offers for share buybacks are often made at a premium to the current market price; it may be in an investor’s best ... Read Full Answer >>
  2. How is a tender offer used by an individual, group or company seeking to purchase ...

    A tender offer is made directly to shareholders in a publicly traded company to gain enough shares to force a sale of the ... Read Full Answer >>
  3. Why would it be in the interest of shareholders to accept a tender offer?

    It would be in the best interests of shareholders to accept a tender offer if it is well above the current market price – ... Read Full Answer >>
  4. How does a company record profits using the equity method?

    A company that invests in another company and has majority control of it would record profits using the equity method. This ... Read Full Answer >>
  5. What usually happens to the price of a stock when a tender offer for shares of the ...

    Usually, the price of a stock rises when a tender offer for shares of the company is made public. A tender offer is an offer ... Read Full Answer >>
  6. How does horizontal integration allow companies to share resources?

    In a horizontal integration, a company either acquires another company or merges with that company. This allows the resulting ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Proxy Voting Gives Fund Shareholders A Say

    You have the right to take part in important company decisions - even if you cannot attend the meetings.
  2. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  3. Investing

    How To Profit From M&A Announcements

    We look at four strategies that seek to profit from merger and acquisitions announcements.
  4. Stock Analysis

    The CVS Target Deal: A Healthy Union?

    The CVS Health and Target deal should be a win for both. Here's an analysis with a twist.
  5. Investing News

    Most Important Mergers And Acquisitions Of 2015

    Nearly halfway through the year, 2015 is proving to be a big one for mergers and acquisitions.
  6. Fundamental Analysis

    Explaining Capital Employed

    Generally, capital employed refers to all of the assets used in a business that contribute to the company’s ability to earn revenue.
  7. Investing

    Salesforce Buyout

    It’s been over a month now since buyout rumors first began to circulate after sources revealed that Salesforce, the biggest cloud computing software company, was approached by a potential buyer. ...
  8. Entrepreneurship

    How to Exit Your Small Business with Grace

    Here is a guide for how best to leave your baby — your small business.
  9. Investing Basics

    10 Facts You Didn’t Know About Amazon

    Learn some interesting facts about Amazon.com Incorporated, the history behind Amazon's name and the hidden services and technologies that Amazon offers.
  10. Professionals

    The 15 Fastest-Growing RIAs

    Registered investment advisors are consolidating their business and assets. Here are 15 of the fastest-growing RIAs.

You May Also Like

Hot Definitions
  1. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  2. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  4. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  5. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!