How it works in a data room
Listed companies usually require a standstill before giving a bidder access to non-public information. The clause sits in the non-disclosure agreement, which bidders sign before receiving room credentials, sometimes confirmed through an NDA click-through on first login. Standstills commonly run for 6 to 18 months and may fall away if another party announces a deal. The room’s access records show who received information under the agreement and when.
Why it matters in a deal
Without a standstill, a bidder could use confidential information from the room to build a stake or go directly to shareholders with a hostile offer. The clause protects the board’s control over the process and its ability to compare offers fairly. It mostly matters for public targets, though private companies with many shareholders sometimes use similar terms. This is general information; securities counsel should draft the clause.
Example
A listed software company runs a private sale process. Each of five bidders signs an NDA with a 12-month standstill before entering the room. One bidder drops out, then six months later starts buying shares on the market. The company points to the standstill, and the bidder sells down its position. The IPO and capital markets guide covers public company rooms.