[erebus_rex]

Takeovers cost time and money to execute (lawyers, consultants, bank fees) beyond just the purchases price. If the deal does not go through it is a loss for the acquirer, hence breakup fees. If the chance of takeover failure is low the acquirer will be willing to accept a smaller insurance.

[ikeboy]

The fee is only paid if it doesn't go through. So I still fail to see how that reflects the chance of success.