September 2018
Beginner to intermediate
368 pages
9h 12m
English
Content preview from Mergers & Acquisitions For Dummies
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Chapter 13
LOI and Behold: Making or Receiving an Offer
IN THIS CHAPTER
Understanding the LOI’s purpose
Looking at the LOI’s inner workings
Considering extending exclusivity
Moving forward after the letter is signed
Although many things — an indication of interest (see Chapter 9), a term sheet, a phone call where Buyer says, “We’re interested and we’re willing to pay $10 million” — can be an offer in the M&A world, not all offers are created equal. In the world of offers, the letter of intent (LOI) is in a class of its own; it’s the gold standard of offers. This chapter gives you the lowdown on this document, including its important parts and some considerations to keep in mind while reviewing it.
Signaling Sincerity with a Letter of Intent
An LOI is basically a marriage proposal from Buyer. Both parties promise to stop seeing others and signal to each other that they’re very serious about wrapping up the deal. In dating, that deal is wrapped up at the wedding; in M&A, it happens at the closing.
As the name implies, the LOI lays out the intent of both parties: Seller states she ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.