How do I handle the bid I have received on my company?

Expressions of interest and bids: a common occurrence

It is not uncommon for investors to show interest in your company and even place a bid, hoping you will accept it without exploring other opportunities. In such situations, it is wise to hire an advisor like Merge. We can help you evaluate the bid, create competition if desired, and ultimately ensure the deal is closed on the best possible terms.

The true value of the bid

The bid you receive from a party that has proactively approached you is rarely the highest you could obtain in the market. Bids generally follow a normal distribution curve, and the likelihood that this particular bid is the best is relatively low. It is also a common tactic for acquirers not to present their best bid initially. By having an experienced advisor by your side, you can maximise your chances of increasing the bid during the process. We have often succeeded in raising bids by 50-100% or even more.

Creating competition in the process provides a better negotiating position

A bidder who knows they are the only interested party has a completely different negotiating position than in a more competitive process. When they feel they have no competition for the deal, they may withhold their best offer. This makes it even more crucial to create a competitive situation to drive up the price and other terms. Without an advisor on your side, negotiating effectively becomes even harder, as many entrepreneurs are experts in running their businesses—not in M&A and optimising outcomes in such processes.

Expertise in the negotiation

Even if you are considering accepting the bid, there are significant advantages to having an advisor like Merge by your side. The bidder has likely conducted similar transactions many times before and therefore has an advantage in the negotiation process. By having an experienced advisor with you, you ensure that you also have the necessary expertise to navigate the negotiations and secure the best possible terms.

Summary

Handling a bid on your company requires careful consideration and expertise. An advisor like Merge can make a significant difference in evaluating and potentially increasing the bid, as well as ensuring the deal is executed in the best possible way. Whether you wish to proceed with the bid or not, it is always a good idea to have an experienced advisor on your side.

Contact us today to discuss your situation, the bid you have received, and how we can help you get the most out of your company and ensure a successful deal. We are always happy to have an initial, no-obligation meeting!