Review counter-LOI in a multiple offers on a brokered search scenario?

by a searcher

4 years ago

If there are multiple offers on an opportunity, is it acceptable/professional to ask the broker for a copy of the (redacted) counter-offer LOI? The intent here would be to review in detail before formulating a counter-offer, if there is further interest. This would also, quite frankly, eliminate any "padding" that may or may not have occurred in verbal conversations....

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searcher from Southwestern University

The broker is a representative for the seller. Their entire job is to increase the sales price (while still selling) the company. This works in the RE world because the brokers must be fiduciaries. There are no such limitations on misrepresentations in the business broker side, so they will most likely not provide you a copy of an LOI from another bidder.

11 months ago | like reply | 0 likes

intermediary from Northwestern University - Kellogg School of Management

Having been a entrepreneur, yes - always be willing to walk away at whatever your reservation price is. Now being a broker and former buyer at Fortune500 companies, I'll say this - don't always assume a broker coming back is because there aren't any other good offers on the table. A good broker will always make buyers think there are multiple offers on the table --@----.com Especially when it involves large PE funds and corporate strategic buyers.

That said, if you want to be taken seriously - remove as much risk as you can from "contingent funding". It makes all of us brokers uneasy when we see buyers that bid with no committed funding to do the deal. You're all likely bidding against committed capital if you enter a bidding process - don't put yourselves behind the 8-ball by having zero committed funding or letters to prove so. Also, overly "creative" deal structures = I don't have committed funding.

1 year ago | like reply | 1 like

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