Standstill Agreement Adalah: What You Need to Know

A Standstill Agreement, or perjanjian penghentian sementara, is a type of legal agreement commonly used in the corporate world. Also known as a “standstill pact,” this agreement is an arrangement between two parties that temporarily prevents one party from taking certain actions and allows the other party to negotiate and reach a resolution.

In the context of mergers and acquisitions, a standstill agreement is often used to prevent a hostile takeover by the acquiring company. The target company agrees to not take any defensive measures, such as implementing a poison pill, while the acquiring company agrees to not take any further action to acquire the target company for a specific period of time.

The purpose of a standstill agreement is to provide a temporary period of time for the parties to negotiate the terms of an agreement. By doing so, it allows both parties to openly and freely discuss their interests and arrive at an agreement that is mutually beneficial.

There are several key components that are typically found in a standstill agreement. These include:

1. Duration: The agreement specifies the length of time that the standstill will remain in effect.

2. Restrictions: The agreement outlines the actions that are restricted during the standstill period. These may include delaying a decision on a merger or acquisition, implementing a poison pill, or making significant changes to the target company`s Board of Directors.

3. Exceptions: In some cases, exceptions may be made to the restrictions specified in the agreement. For example, the acquiring company may be allowed to make a tender offer if certain conditions are met.

4. Termination: The agreement specifies the circumstances under which the standstill will terminate. This may include the successful negotiation of a merger or acquisition agreement, the expiration of the standstill period, or the occurrence of certain triggering events.

In Indonesia, standstill agreements are often used in the context of mergers and acquisitions. They provide a valuable tool for negotiating and reaching agreements that are mutually beneficial to both parties.

If you are considering entering into a standstill agreement, it is important to consult with a legal professional who has experience in this area. They can help ensure that the agreement is properly drafted and that your interests are protected.

In conclusion, a standstill agreement is a valuable legal tool that allows parties to negotiate and reach agreements that are mutually beneficial. By understanding the key components of a standstill agreement, you can better navigate the negotiation process and arrive at a successful resolution.