An option granted by a target company's board of directors to a buyer in a tender offer. Buyers in a friendly merger structured as a two-step merger can use a top-up option to acquire newly issued target company shares directly from the target company that, when combined with the stock already acquired in the tender offer, constitutes enough shares to meet the threshold required to complete a short-form merger. A buyer can typically only exercise a top-up option after the closing of the tender offer and generally the top-up option is exercisable for the same consideration that the buyer offered in the tender offer. In most cases, a buyer can only exercise a top-up option if its tender offer succeeds in acquiring some minimum threshold amount of the target company's capital stock.

For more information on top-up options, see: