Lock-Up (M&A Glossary)

Summary

In an underwriting agreement, the lock-up provision prohibits the issuer from selling shares during a period of time after the closing of an initial public offering. In the context of a hostile takeover, the term refers to an arrangement where the target company grants to a friendly suitor, or white knight, the option to buy either shares at a below-market price or a highly profitable asset of the target company, known as a crown jewel.