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. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  6. Merger

    The combining of two or more companies, generally by offering ...
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 News

    Sun Pharma And Ranbaxy: An Ideal Pharma Marriage?

    The Sun Pharma merger with Ranbaxy will blend the complementary market strengths and areas of expertise of each company and create a powerful pharma force.
  4. Investing

    Facebook's Most Important Acquisitions

    Strategic acquisitions have been key to Facebook's growth and success, and the company has acquired more than 50 companies or properties since it's formation in 2004.
  5. Investing Basics

    Poison Pill

    A poison pill is a corporate maneuver put in place to try and prevent a hostile takeover. The target corporation uses this strategy to make its stock less attractive to the acquirer. This is ...
  6. Stock Analysis

    Breaking Down the Halliburton Baker Hughes Deal

    Halliburton is using a downturn to get bigger and stronger in the long term, and the company is getting Baker Hughes at a reasonable price as a result.
  7. Brokers

    Key Differences Between M&A Advisors And Business Brokers

    For a buy, sale or partnership for one's business, one needs brokers and advisors to proceed ahead. Here are the key differences between business brokers and M&A advisors.
  8. Trading Strategies

    Selecting Mergers & Acquisitions Advisories For Small Businesses

    Mergers and acquisitions advisories aren't just for big players. Many advisory firms cater to small and medium businesses.
  9. Investing

    M&A Advisory Business Boutiques: How The Small Shops Are Capturing Large M&A Deals

    M&A advisory boutiques are becoming a big business, giving large investment banks a run for their money.
  10. Chart Advisor

    The Best Way Into Big Pharma? See This ETF (IHE)

    Pharma investing isn't for everyone, but sector-specific ETFs, such as the iShares Dow Jones U.S. Pharmaceuticals ETF (IHE), are changing the game.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center