One of multiple restrictions that are imposed on actions of a target firm (or a shareholder). A no-shop restriction prevents a target from shopping for better deals- i.e., soliciting alternative proposals, usually during a specific period of exclusivity, after which the bid period ushers in. The effect of this restriction would be more anti-competitive for longer exclusivity periods. In the meantime, a target is not allowed to directly or indirectly solicit, invite, encourage or initiate any competing proposal or any inquiries, embark on any negotiations or discussions with a third party on account of any potential competing proposal, or communicate any intention of such actions.

A toned-down no-shop restriction does not prevent the target from tackling unsolicited proposals, but at times it has to be reported under a notification obligation. A limited and reasonable no-shop restriction does not prompt a “fiduciary out” situation. The anti-competitive effect may, consequently, pile up. However, the narrower the notification, the lower that effect, given that only limited information can be notified.