In mergers and acquisitions transactions, a buyer and a seller will often agree to contractual mechanisms (deal protection devices) to deter third parties from jumping the deal and to compensate a disappointed buyer. With the help of auction theory, this Article analyzes various deal protection devices, while focusing on the two most commonly used mechanisms: match rights and target termination fees. A match right gives the buyer a right to “match” a third party’s offer so as to prevent the third party from snatching the target away, while a termination fee compensates the buyer when a third party acquires the target. Such mechanisms raise a number of important corporate and contract law questions. How effective are they in preventing third parties from competing for the target? Do they steer the target to be sold to a buyer who values the target less? Are the devices harmful to the target shareholders? To what extent can the negotiated deal price represent the target’s “fair value” when such devices reduce or eliminate the competition? This Article shows, foremost, that these devices can actually increase the target and buyer’s joint return and possibly the target’s stand-alone return. Match rights and termination fees function quite differently, however. While a large termination fee reduces the target’s stand-alone return and can lead to allocative inefficiency, an unlimited match right increases the target’s stand-alone return and promotes allocative efficiency.

This Article argues that answering the corporate law questions ultimately turns on the question of how and why the target directors are utilizing the devices. If the devices are being deployed with the objective of maximizing the target shareholders’ return, not only can they be beneficial for the target shareholders, but their presence can also make the deal price a more reliable indicator of the target’s fair value. With an improper objective, not only do the devices undermine target shareholders’ return, but the court also should not use the deal price as evidence of fair value. This Article also analyzes stock and asset lockups and examines deal protection devices through the lens of contract law.

在并购交易中，买方和卖方通常会同意合同机制（交易保护机制），以阻止第三方放弃交易并补偿失望的买方。本文借助拍卖理论，分析了各种交易保护机制，同时重点介绍了两种最常用的机制：匹配权和目标终止费。匹配权赋予买方“匹配”第三方报价的权利，以防止第三方抢走标的，而终止费则是在第三方收购标的时补偿买方。此类机制引发了许多重要的公司法和合同法问题。它们在防止第三方竞争目标方面的效果如何？他们是否引导目标出售给对目标估值较低的买家？这些设备是否对目标股东有害？当此类设备减少或消除竞争时，协商的交易价格在多大程度上可以代表目标公司的“公允价值”？本文首先表明，这些设备实际上可以增加目标和买方的联合回报，并可能增加目标的独立回报。然而，比赛权和终止费的作用却大不相同。虽然高额的终止费会降低目标的单机收益并可能导致配置效率低下，但无限匹配权会增加目标的单机收益并提高配置效率。

本文认为，回答公司法问题最终会涉及目标董事如何以及为何使用这些设备的问题。如果部署这些设备的目的是最大化目标股东的回报，它们不仅可以为目标股东带来好处，而且它们的存在还可以使交易价格成为目标公司公允价值的更可靠指标。目的不正当，不仅会损害目标股东的回报，法院也不应将交易价格作为公允价值的证据。本文还通过合同法的视角分析了股票和资产锁定并审查了交易保护措施。