Module III· ECM — Follow-on, ABB, Rights IssueIntermediate
Question

Which lock-up terms are typically agreed in a follow-on?

Answer

Selling shareholders may agree not to sell additional shares for a period, often 60 to 180 days depending on deal type, size, and investor concern. Issuers may also agree not to issue more shares. Lock-ups reduce overhang and support pricing. Exceptions often cover employee plans, M&A, or consent by bookrunners.