Seller looking to retrade at DD stage – how would you handle it?

May 03, 2025

by a searcher in Kelowna, BC, Canada

Looking for some perspective from folks who’ve been through this. I’m under LOI on a deal with fairly detailed terms, including a vendor note (~15%) subordinated to senior debt and backed by a PG. DD has been smooth so far, financing is lined up, we’ve done site visits, and weekly calls with the seller and team have been going well. The seller seems reasonable and good to work with. The broker, though, has been a bit scattered in communication. Now he’s suddenly pushing back on the fact that the PG is already committed to the senior lender, saying it weakens the VN’s security. I explained that PGs are a non-starter with pretty much every lender in this space—it’s standard. He’s fishing for more security or removing VN. I reiterated that the LOI is clear: a PG backs the VN, but there’s nothing about exclusivity. Lastly, told him it’s up to the seller how they want to proceed, but I’m firm on the LOI terms. Things have gone silent since then.(2-3 days) Was it the right call. Curious how you would handle this ?

Reply by a professional
from Bentley College in Miami, FL, USA

You handled it exactly right by calmly reinforcing the agreed-upon terms and putting the onus back on the seller. At this stage in diligence—with financing lined up and no material changes to the business—pushing to retrade the deal isn’t just frustrating, it’s a trust signal. Here’s how to think about it: 1. Stick to principle, not emotion – Retrading happens, but unless something new justifies it (e.g., financial surprises, operational risks), it undermines deal integrity. You’re right to hold the line if nothing material has changed. 2. Let the silence play out – A couple of quiet days may just mean internal discussions. The broker may also be testing your resolve. Don’t chase here—your calm, firm stance puts the pressure back on them. 3. Have a walk-away plan – If they try to materially change the structure now, especially after weeks of mutual progress, it raises questions about post-close dynamics. A good seller shouldn’t need a broker to backpedal on clearly negotiated terms. If things restart, you might consider documenting a quick reaffirmation of deal terms in writing to ensure alignment moving forward. If it stalls or derails, a clean break might actually save you time and headache.

Reply by a searcher
from University of Pennsylvania in Bryn Mawr, PA, USA

Sorry to hear, that's tough. Hope you weren't too far into DD. I'm typically surprised by what I learn by being curious and asking questions - instead of responding. Obviously, the other party has to be willing to/interested in talking, but if they are, I'd ask why the change? Try to find out what specific need they're trying to fill. Are there other ways to address their need/concern? I frequently find there is. Is this coming from the broker or the seller? If the former, I'd be curious.

+1 more reply.

Join the discussion