Vendors selling companies to private equity firms are demanding some of the biggest break fees agreed to date, reflecting the uncertainty dogging the buyout industry since the credit crunch began.

In the US, a break fee is paid to a vendor in the event the buyer decides to pull out of the sale once a deal has been agreed, although the practice is less common in the UK. With buyout firms and their lenders struggling to arrange debt to fund deals due to the credit crunch, vendors, particularly in the US, have sought added protection in case the deals fall through.