Threshold (M&A Glossary)

Summary

An M&A transaction and its documents will frequently feature a number of thresholds that must be met before material consequences can ensue. For example, a threshold for a superior offer sets a floor for the consideration upon which an offer to purchase the target is deemed superior to the existing deal. Another definition of threshold, used in an indemnification provision, is the amount of indemnified claims that must be reached in order to trigger the indemnification obligation.