Capital One has proposed acquiring Discover Financial in an all-stock deal valued at $35.3 billion. If Discover decides to accept a competing offer, it would owe Capital One a breakup fee of $1.38 billion, around 4% of the deal value. However, there is no breakup fee payable if regulators block the acquisition. While Discover cannot actively solicit other bids, it can entertain proposals from deep-pocketed suitors before a shareholder vote. Getting regulatory approval will be challenging, given the current antitrust environment and elections this year. Capital One believes they are well-positioned for approval.