Chapter 3

Preliminary negotiations

Introduction

There is usually a long run into an acquisition during which the two sides make some ‘preliminary agreements’. Most will be agreements on how the parties will behave during the negotiations but some will make it into the final sale and purchase agreement. Most will not be binding, but some will be. To avoid being unwittingly bound by a preliminary agreement you should involve your lawyers.

The most common pre-contractual documents are the confidentiality agreement and the letter of intent and it is these that we will examine in this chapter.

The confidentiality agreement

The pre-acquisition period is a lot like the dance of the seven veils. The prospective target will slowly reveal more ...

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