A company pressured by an aggressive bidder or activist investor believes that a standstill agreement is useful in weakening the unsolicited approach. The deal gives the target company greater control over the deal process, by imposing on the offeror or investor the ability to buy or sell the company`s shares or launch proxy competitions. The draft status quo agreement was formulated on 3 June 1947 by the Political Department of the Anglo-Indian Government. The agreement provided that, until new agreements were concluded, all administrative arrangements of «common interest» that then existed between the British Crown and a particular signatory state would be kept unchanged between the undersigned domination (India or Pakistan). Issues of common interest have been defined in a separate timetable. During the discussion, Jawaharlal Nehru, India`s future prime minister, doubted that the agreement only covered «administrative» issues. Mohammad Ali Jinnah, the future governor-general of Pakistan, said it had to be so.  The Kalat Khanate, located on the western outskirts of Pakistan, has also decided to remain independent. It has signed a status quo agreement with Pakistan. In 2019, video game distributor GameStop signed a standstill agreement with a group of investors who wanted changes in the company`s governance, believing the company had an intrinsic value greater than what the share price reflected. Some local leaders of the Princes tried to buy time by declaring that they would sign the status quo agreement, but not the instrument of accession, until they had time to choose. In response, the Government of India took the position that it would only sign status quo agreements with states that had acceded.
 Until August 15, 1947, the fixed date and date of India`s independence, all but four princely states within India, about 560 of them, signed both the instrument of accession and the status quo agreement with India. The exceptions were Hyderabad, a large state in central India, enlarged by two months, and three small states of Gujarat: Junagadh and its subsidiaries (Mangrol and Babariawad).  A standstill agreement can be used as a form of defence against a hostile acquisition when a target company obtains a promise from an unkind bidder to limit the amount of shares the bidder buys or holds in the offeree company. By recovering the promise of the potential buyer, the target company will gain more time to set up other acquisition defenses. In May 2017, Glencore undertook an informal approach to buying bears. Shortly thereafter, the parties agreed on a standstill agreement preventing Glencore from accumulating shares or making a formal bunge offer until a later date. Common shareholders tend not to like status quo agreements because they limit their potential returns from an acquisition. A standstill agreement is a contract that contains provisions governing how a bidder of a company may buy, sell or vote shares of the target company.
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