The M&A Auction Process: Seller Preparation, Managing Multiple Bids, Negotiating With Preferred Bidders

Description

M&A auctions involve several stages that typically include (1) outreach to potential bidders, (2) preparation and distribution of a bid package, (3) due diligence and review of a draft contract by potential bidders, (4) submission and review of bids, and (5) negotiations between the seller and the preferred bidder(s). Sellers must efficiently navigate each stage in the process while minimizing disruption of their business operations.

A seller must first weigh the pros and cons of conducting an auction and whether a broad or narrow auction would be preferable. The auction process may not be suitable for all sellers, including for businesses that are structurally complicated or are in market sectors with few viable bidders. If an auction is initiated, engaging multiple bidders will force the seller and its advisers to manage separate management presentations, due diligence requests, and deal documentation, including separate confidentiality agreements, contract markups, and disclosure schedules.

Listen as our authoritative panel discusses M&A auctions with a particular focus on making the process as efficient as possible from the perspective of the seller while getting the most desirable bidder to an executed contract.