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

Preparing Initial Bid Package and Form Contract, Pros and Cons of an Auction vs. Bilateral Sale

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, January 19, 2022

Recorded event now available

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Course Materials

This CLE course will examine the M&A auction process from the standpoint of the seller. The panel will discuss preparing the initial bid package, including the confidential information memorandum and form contract, and how best to respond to contract revisions and due diligence requests from multiple bidders. The panel will also discuss the advantages and disadvantages of an auction vs. a negotiated sale and why certain companies may not be suited for sale by auction.

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.

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Outline

  1. M&A auctions: advantages and disadvantages vs. negotiated sale, determining the suitability and broadness of an auction
  2. Preparing for an auction: retaining advisers, preparing a bid package, and other key steps
  3. Conducting the auction
    1. Determining bidder list and initial outreach
    2. Confidentiality agreements and distribution of bid package to bidders
    3. Management presentations and due diligence by bidders
    4. Contract markups and negotiations between seller and one or more preferred bidders
  4. Choosing winning bidder: evaluating multiple bid letters and contract revisions, and considering role of exclusivity

Benefits

The panel will review these and other key issues:

  • What aspects of a company's business or industry dynamics might make it unsuitable for a sale by auction?
  • What internal steps should be taken, and which professional advisers should be retained before proceeding with an auction?
  • What documentation and information should be included in the bid package?
  • How should sellers manage the process efficiently, including navigating multiple due diligence requests and contract markups?

Faculty

Fortin, Jason
Jason Fortin
Executive Director
Goldman Sachs & Co.

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Maswoswe, R. Kirkie
Kirkie Maswoswe
Senior Attorney
Cravath, Swaine & Moore

Ms. Maswoswe’s practice focuses on mergers and acquisitions, activist defense, corporate governance and general...  |  Read More

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