It is distracting to the target and will require them to do lots more work. For example they will need to provide the materials necessary for due diligence. T

It is distracting to the target and will require them to do lots more work. For example they will need to provide the materials necessary for due diligence. The fee ensures the acquirer is serious, and that the target is adequately compensated if it doesn't go through. The acquirer also makes it harder for others to bid because they too need to take into account the fee. https://en.wikipedia.org/wiki/Breakup_fee https://en.wikipedia.org/wiki/Breakup_fee