Takeovers explained: cash or shares, premiums, break fees and the wait to close

Of three large US takeovers announced between 26 October and 2 November 2026, two pay target shareholders only in shares and one mostly in cash. Marvell Technology will pay for Lumentum only in stock, at a fixed 4.500 Marvell shares per Lumentum share (joint release, 2 November). DoorDash offers $65.00 per Instacart share, at least 75% of the total in cash, with holders free to ask for DoorDash stock (release, 29 October). EQT will swap 0.987 of its shares for each Range Resources share (Form 8-K, 26 October). None has closed; each still depends on votes, regulators and a contract that says who pays whom if it fails.

Agreeing to buy a listed company means signing a merger agreement, the contract that fixes the price, the payment and the conditions for completing the deal, a step called closing. DoorDash and Instacart say they will run as separate, independent companies until their deal closes, and holders of about 19% of Instacart's shares have signed agreements to back it (release). Marvell and Lumentum expect closing in the first half of calendar 2028 (release).

In a cash deal, target holders receive a set sum per share; in an all-stock deal, a set number of the buyer's shares, called the exchange ratio. Marvell's ratio of 4.500, which the companies call fixed, and EQT's of 0.987 set the number of shares holders get, but not their value, which moves with the buyer's share price until closing. Hence Marvell's figure of about $1,132 per Lumentum share is pinned to 28 October 2026 closing prices. Afterwards, Lumentum holders would own about 33% of the combined Marvell, and Range holders about 27% of the combined EQT, fully diluted, the companies estimate (Marvell, EQT 8-K).

DoorDash's offer mixes the two. Under its Form 8-K of 29 October 2026, each Instacart holder can elect, per share, $65.00 in cash, 0.3372 DoorDash shares, or $48.75 in cash plus 0.0843 DoorDash shares; holders who make no election receive cash. Stock may not exceed 25% of the total consideration, meaning what holders receive. If too many holders pick shares, stock elections are prorated, or scaled back in proportion, with the rest paid in cash.

A premium is the offer's value above a reference share price, and the date of that price matters. Marvell and Lumentum measured their premium of about 23.9% against both companies' closes on 28 October 2026, which they described as the final session before the market began speculating about a deal (release). DoorDash and Instacart measured their 26% against Instacart's close on 22 October 2026, the last session before media reports of a possible deal, they said (release). EQT and Range state no premium.

The $115bn Marvell and Lumentum gave is an implied enterprise value for Lumentum, a different measure from the value of its shares; their release gives no equity value. DoorDash's figure is an equity value: the companies equate $65.00 a share with about $17bn for Instacart. The more than $50bn in EQT and Range's release is the pro forma enterprise value of the combined group, not a price for Range.

Each agreement lists conditions for closing. EQT's, summarised in its Form 8-K, include votes at both companies, NYSE listing of the new shares, the end of the US antitrust waiting period, no law or court order blocking the deal, an effective SEC registration statement and no material adverse effect at either company. Both sides also accepted a non-solicitation clause, known in the market as a no-shop: neither may seek rival offers, but before its shareholder vote each board may engage with an unsolicited, bona fide bid it judges could lead to a superior offer.

Termination fees, often called break fees, are due if a deal ends in specified ways. Range would owe EQT $423m, and EQT would owe Range $1,148m, in cases the 8-K sets out. Instacart would owe DoorDash $650m in cases including leaving to sign a superior proposal, and would repay up to $25m of DoorDash's expenses if its holders reject the deal, credited against any later fee. DoorDash would owe Instacart $1.25bn if the deadline passes with antitrust approval the only condition missing, or if a final, non-appealable antitrust ruling blocks the deal (8-K). Markets call such a buyer-paid fee a reverse termination fee, a term the 8-K does not use.

Each contract also has an outside date, after which either side may walk away. EQT and Range set 25 October 2027, extended automatically to 25 April 2028 if only the antitrust condition or a legal block remains. DoorDash and Instacart set 12 months from signing, with up to four automatic three-month extensions if only antitrust conditions are open. DoorDash's 8-K says closing carries no financing condition. JPMorgan Chase Bank has committed, subject to customary conditions, to a 364-day senior unsecured bridge loan of up to $13.0bn, which DoorDash expects to replace before closing with cash on hand and permanent financing.

Buyers paying in stock register the new shares with the SEC; Marvell, EQT and DoorDash all name Form S-4, the form for securities issued in deals such as mergers and exchange offers. Its instructions require a summary of the terms, both companies' reasons, the accounting and federal tax treatment, the regulatory approvals needed and their status, whether appraisal (dissenters') rights exist, and both companies' share values on the day before the announcement. Marvell said on 2 November 2026 that it intends to file an S-4 that will double as a joint proxy statement for both sets of holders and a prospectus for the new shares (release). EQT's agreement makes an effective S-4 a closing condition.

DoorDash and Instacart's conditions name the HSR waiting period plus clearance under Canada's Competition Act and Israel's Economic Competition Law (8-K). In the EU, a deal with an EU dimension must be notified to the European Commission and generally may not be implemented until the Commission clears it. One test is combined worldwide turnover above €5bn and EU turnover above €250m for at least two of the firms individually; neither of the two tests is met if each firm earns over two-thirds of its EU turnover in one and the same member state (Commission).

The Commission then has 25 working days for a Phase I review and says more than 90% of cases end there, generally without remedies. Otherwise it opens Phase II, an in-depth probe with 90 working days for a decision, extendable by 15 or 20 working days. Companies can offer remedies, called commitments, in either phase. The final decision clears a deal, clears it with remedies or prohibits it, and can be challenged at the EU General Court and then the Court of Justice (Commission). Polstob has not checked whether the three deals need EU clearance.

All three deals need a target shareholder vote. A buyer can instead make a tender offer: a time-limited bid made directly to each holder for a large part of a company's stock, usually at a premium to the market price, according to the SEC's Investor.gov. Most require a Schedule TO filing; holders get protections such as withdrawal rights. Under Rule 14e-1, an offer must stay open at least 20 business days, and at least 10 business days after a change in price or in the share of stock sought.

The UK Takeover Code's General Principles require equivalent treatment for holders of the same class, enough time and information for them to decide, and a target board that acts for the whole company without denying holders the chance to judge the bid. A bidder must be sure it can pay any cash in full before announcing. Under Rule 2.6, a publicly named potential bidder has until 5.00 pm on the 28th day to make a firm offer or say it will not bid, a deadline the market calls put up or shut up. The Panel normally extends it if the target's board asks.