Should Bid targets pay break fees?

We do not think that bid targets should be allowed to enter into binding agreements to pay any indemnity to the bidder until the shareholders have been able to formally vote on the merger/sale proposal.

All too often, the amounts that are agreed are way above any reasonable costs that the bidder may have incurred.

One has to assume that this type of agreement more often than not is intended to discourage competing bids. As such, break-up fees are not in the interest of the company's shareholders.