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What Is a No-Shop (Exclusivity) Clause in an M&A Deal?

Last reviewed: November 2026 · Jurisdiction: United States (Delaware corporate law)

Person in a dark suit signing a printed contract with a blue pen at a wooden desk

A no-shop clause — also called a no-solicitation or exclusivity provision — in a signed merger agreement generally bars the company being sold from soliciting, initiating or knowingly encouraging competing bids after it has already signed with a buyer. Most no-shops still leave the board a fiduciary out: it may respond to an *unsolicited* proposal that is, or could reasonably lead to, a superior proposal, and may terminate the signed deal to accept that proposal after paying a termination fee and honoring any match right the first buyer negotiated. That post-signing restraint is different from exclusivity agreed earlier, in a letter of intent, before a definitive merger agreement exists. Delaware courts have treated clearly drafted LOI exclusivity as an enforceable bargained-for right — and have said a seller should not assume it has an unwritten fiduciary out from that promise.

No-shops are the usual post-signing posture in a sale of a Delaware company. A go-shop is the opposite structure for a limited window: the target may actively solicit higher bids after signing, then typically reverts to a no-shop.

At a glance

Question	Short answer	Source
What is a no-shop in a merger agreement?	After signing, the target generally may not solicit or encourage competing proposals	Del Monte (Del. Ch. 2011), describing a "customary no-solicitation clause"
Does the board have any flexibility?	Usually a fiduciary out: it may respond to an unsolicited superior proposal, often subject to a match right and a termination fee	Lear (Del. Ch. 2007); Del Monte
What is a window-shop?	The court's own shorthand in Lear for the post-go-shop phase: no active solicitation, but the board may still accept an unsolicited superior proposal	Lear
How is that different from a go-shop?	A go-shop permits active solicitation for a set period after signing	Lear; Del Monte
Is LOI exclusivity the same thing?	No. It is a pre-signing promise, often in a letter of intent, not to shop the deal while the parties negotiate a definitive agreement	HLS Forum / Kirkland summary of Global Asset Capital v. Rubicon (Del. Ch. 2009); our letter of intent page
Does Delaware imply a fiduciary out in every exclusivity promise?	No. The Rubicon TRO summaries say a fiduciary out must be bargained for	HLS Forum (Jan. 24, 2010); Richards, Layton & Finger (Jan. 28, 2010)
Must a board run an auction or a go-shop?	No. There is "no single blueprint"; a viable passive market check can suffice	C&J Energy (Del. 2014)

No-shop vs. go-shop vs. window-shop

No-shop (no-solicitation). After signing a merger agreement, the target may not solicit, initiate or knowingly encourage competing proposals. The Del Monte merger agreement is an example the Court of Chancery called a "customary no-solicitation clause": once that deal's go-shop ended, Del Monte was prohibited from initiating, soliciting or knowingly encouraging acquisition proposals, while still being allowed to respond to a "Superior Proposal."
Window-shop. In *Lear*, Vice Chancellor Strine described the period after a 45-day go-shop as a second phase "which might be called a 'no-shop' or 'window-shop' period," during which the board "retained the right to accept an unsolicited superior proposal." In other words, the board cannot go looking, but it can talk to a bidder who walks in — if the agreement's fiduciary-out terms are met.
Go-shop. For a defined period after signing, the target and its advisors can affirmatively contact potential buyers, share confidential information under confidentiality agreements, and negotiate. In Del Monte, the agreement let the company "initiate, solicit and encourage" acquisition proposals for 45 days.

A no-shop is therefore the baseline restraint. A go-shop is a negotiated exception for a limited window. A window-shop is the no-shop-plus-fiduciary-out posture that often follows.

How a no-shop in a signed merger agreement usually works

The terms are negotiated deal by deal. Common building blocks, as seen in the agreements described in the Delaware opinions:

The prohibition. The target agrees not to solicit, initiate or knowingly encourage competing acquisition proposals, and often not to provide confidential information to other bidders except as the fiduciary out allows.
The fiduciary out. The board may consider, and sometimes terminate to accept, an unsolicited proposal that meets the agreement's definition of a superior proposal (or that could reasonably be expected to lead to one). In *Lear*, the fiduciary out permitted the board to accept an unsolicited superior third-party bid after the go-shop period ended.
Match rights. Before the target can terminate for a superior proposal, the first buyer gets notice and a period to match. Lear gave the buyer 10 days (and only one chance to match a bid above $37 per share). Del Monte gave three business days, then two business days for each later round.
Termination fee. If the target terminates to take a superior proposal, it typically pays the first buyer a fee. In Lear, the fee was $73.5 million plus up to $6 million of expenses if termination occurred during the go-shop (2.79% of equity value; 1.9% of enterprise value), versus about $100 million all-in after the window (3.52% of equity; 2.4% of enterprise value). In Del Monte, the fee was $60 million (1.13% of deal value) for an "Excluded Party" that had made a qualifying proposal during the go-shop and $120 million (2.26%) otherwise.

These numbers describe those two deals only. They are not a market standard. A no-shop's real effect depends on how the prohibition, the fiduciary out, the match right and the fee interact.

Exclusivity during a letter of intent — a different promise

Before a definitive merger agreement is signed, parties often sign a letter of intent. Our live explainer notes that LOIs are typically non-binding on the substantive deal terms — the parties are not obligated to complete the transaction — but are binding on specific procedural provisions such as exclusivity, confidentiality and expense allocation.

That pre-signing exclusivity is sometimes also called a "no-shop," which is why the two ideas get mixed together. They are not the same contract:

Timing. LOI exclusivity applies while the parties negotiate a definitive agreement. A merger-agreement no-shop applies after that definitive agreement is signed.
What the seller is promising. In an LOI, the seller typically promises not to shop the company (or a stated set of assets) to other buyers for a defined period, so the first bidder will spend time and money on diligence. In a merger agreement, the seller has already committed to a signed deal and is promising not to solicit a higher bid except as the fiduciary out allows.
Fiduciary out. Merger-agreement no-shops for Delaware public-company targets commonly include an express fiduciary out. Pre-signing exclusivity may or may not. In *Global Asset Capital, LLC v. Rubicon US REIT, Inc.*, C.A. No. 5071-VCL (Del. Ch. Nov. 16, 2009), Vice Chancellor Laster granted a temporary restraining order after Global claimed Rubicon had breached the exclusivity and confidentiality provisions of a letter of intent. Summaries of that bench ruling by Kirkland & Ellis (posted on the Harvard Law School Forum on Corporate Governance, Jan. 24, 2010) and by Richards, Layton & Finger (Jan. 28, 2010) report that the court:
treated the LOI's no-shop/exclusivity and confidentiality terms as definite enough to create rights;
said an exclusivity provision is a unique opportunity that is not "readily remedied after the fact by money damages," so injunctive relief can be appropriate;
said Delaware does not recognize an inherent fiduciary out in every contract if one was not negotiated: "a fiduciary out must be an aspect of the bargain";
noted that parties who want a non-binding LOI can say so expressly.

That decision was a TRO on a preliminary record, not a post-trial opinion. It is still the main Delaware illustration of why exclusivity in an LOI should be read as its own promise, not as a quieter version of a merger-agreement no-shop.

What Delaware courts have said

Lear (Del. Ch. 2007). After a 45-day go-shop, Lear's agreement moved into what the court called a "no-shop" or "window-shop" period, with a fiduciary out for unsolicited superior proposals, a 10-day match right and a higher termination fee. The court largely rejected stockholder challenges to the sale process. It gave "relatively little weight" to the lower go-shop fee because a competing bidder effectively had to complete "the whole shebang" inside 45 days, but it did not find the overall fee and match-right package bid-chilling.
Del Monte (Del. Ch. 2011). The court described the post-go-shop restraint as a "customary no-solicitation clause" that still permitted a response to a Superior Proposal. It found the go-shop process tainted because the sell-side bank running it also stood to earn buy-side financing fees, and it temporarily barred enforcement of the no-shop, match-right and related termination-fee provisions. The court added that those same deal protections "would be quite reasonable" in an arm's-length deal. The practical point for a no-shop is the same one the court made about the go-shop: the words on the page matter, and so does who is running the process.
C&J Energy (Del. 2014). The Delaware Supreme Court reversed a Chancery order that had required a company to shop itself. Revlon does not require an auction, and "there is no single blueprint" for directors. A "viable passive market check," plus a fully informed, uncoerced stockholder vote, can be enough. A no-shop with a working fiduciary out is one way — not the only way — a board may leave room for that check.
Rubicon (Del. Ch. 2009, TRO). As summarized above, pre-signing exclusivity can be enforced, and a board should not count on an implied fiduciary out that it did not negotiate.

What to look for in a no-shop or exclusivity clause

If you are a director, a significant stockholder or a buyer negotiating one, counsel will typically focus on:

Which document it sits in — a letter of intent or a definitive merger agreement — and whether the clause is expressly binding.
What conduct is barred — soliciting, encouraging, providing information, waiving standstills, or all of those.
Whether there is an express fiduciary out, and what counts as a "superior proposal."
Match rights — how long, how many rounds, and what the first buyer learns about competing bids.
The termination fee (or other consequence) if the target terminates for a superior proposal, and whether any reduced fee applies to a bidder who emerged during a go-shop window.
Duration, especially in an LOI: when exclusivity starts and when it ends if a definitive agreement is not signed.
Who runs any post-signing process — a conflicted banker or a management team with a stake in a particular buyer can undercut even a clause that looks customary on paper (*Del Monte*).

When to talk to counsel

Speak with an M&A or corporate attorney (and, for litigation, a Delaware or business-litigation lawyer) if:

your board is being asked to sign a merger agreement with a no-shop, or an LOI with exclusivity, and you need to understand the fiduciary out, match rights and fees;
you are a buyer that wants exclusivity during diligence or a no-shop after signing, and you want those promises to be enforceable;
you are a stockholder questioning whether a sale process left room for a real market check;
another bidder has appeared and there is a dispute over whether the board may talk to that bidder, whether a proposal is "superior," or whether a match right has been honored;
an LOI's exclusivity period is still running and the other side has gone silent or started talking to someone else.

Featured attorneys: Haute Lawyer Network members include Glenn L. Udell, a partner at Brown, Udell, Pomerantz & Delrahim, Ltd. in Chicago whose practice includes real estate, corporate transactions and complex commercial litigation, including acquisitions and dispositions, and Natasha Belon, managing attorney of Lotus Law PLLC in Denver, Colorado, whose business and corporate practice includes business purchases and sales, corporate governance, partner buyouts and mergers and acquisitions. Browse Business Law attorneys or Find a Lawyer. *Listed attorneys are paid members of the Haute Lawyer Network. Editorial selection, not a ranking.*

Related

Sources

*In re Lear Corp. S'holder Litig.*, 926 A.2d 94 (Del. Ch. 2007), C.A. No. 2728-VCS (June 15, 2007) — opinion PDF, Delaware Courts (accessed Nov. 8, 2026)
*In re Del Monte Foods Co. S'holders Litig.*, 25 A.3d 813 (Del. Ch. 2011), Consol. C.A. No. 6027-VCL (Feb. 14, 2011) — opinion PDF, Delaware Courts (accessed Nov. 8, 2026)
*C&J Energy Servs., Inc. v. City of Miami Gen. Emps.' & Sanitation Emps.' Ret. Tr.*, 107 A.3d 1049 (Del. 2014) (Dec. 19, 2014) — opinion PDF, Delaware Courts (accessed Nov. 8, 2026)
*Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.*, 506 A.2d 173 (Del. 1986) (as cited in *C&J Energy*)
*Global Asset Capital, LLC v. Rubicon US REIT, Inc.*, C.A. No. 5071-VCL (Del. Ch. Nov. 16, 2009), as summarized in David Fox / Daniel Wolf, Letters of Intent — Ties that Bind?, Harvard Law School Forum on Corporate Governance (Jan. 24, 2010), and Richards, Layton & Finger, Delaware Corporate Law Decision — Global Asset Capital, LLC v. Rubicon US Reit, Inc. (Jan. 28, 2010) (both accessed Nov. 8, 2026)
Guhan Subramanian & Annie Zhao, Go-Shops Revisited, 133 Harv. L. Rev. 1215 (2020) (accessed Nov. 8, 2026; used here only as background on the go-shop counterpart, not for market-frequency claims on this page)

*This article is general information, not legal advice. Merger agreement terms and fiduciary-duty standards depend on the specific deal, the governing documents and the state of incorporation; talk with a licensed corporate or M&A attorney about your situation.*

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