What information should a company provide a potential acquirer prior to an offer being made. This is information before you go into the due diligence phase. All of the information provided is under NDA but is there any data that I should avoid providing even though the acquirer is asking for the it (e.g., P&L forecast). I know the acquirer is asking of the information to make a good offer, but we are skeptical about cornering ourselves if we give certain information prior to an offer. Any thoughts?
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I always contend that one has to approach every negotiation FAIRLY and IN GOOD FAITH. Having said that and since the NDA is signed....you should provide them ALL information that they requested, however NOTHING MORE. Do NOT volunteer info either. If the acquirer discovers that you did NOT provide the information, they requested and is crucial to their decision (decision to proceed, pricing, etc) , there may be legal blowback. I would also point out that if it is their "negligence" or "incompetence" for not requesting a certain piece of info....then it is NOT your fault.
From an M&A professional's perspective, I'd encourage you to look at the requests from a commercial perspective. If you seek an attractive offer you will have to accept that you'll need to provide information you'd otherwise prefer not to. That said, you do control the process. In regards to forecasts specifically, this is always contentious. My generic thought would be that if your forecasts are shaky, do not provide them until you are willing to be held to them. If however there is a positive story there is less downside. If you don't provide useful information you run the
I am on the side of the acquirer and from this perspective the only way to know if you are making a fair and solid offer is to analyze the business. I wouldn't really be to concerned with your forecasts unless you had a deal in the pipeline that is significant and worth mentioning because it adds value to the deal. I can simply review a couple of years P&L and tell what the business has been doing.
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