Mergers & Acquisitions For Dummies, 2nd Edition

Chapter 8

Reading and Writing the Offers

IN THIS CHAPTER

Delving into the indication of interest (IOI)

Examining the letter of intent (LOI)

Going steady with exclusivity

Learning how to make bids

How do buyers indicate their interest in doing a deal, and how do they detail their intent? What should sellers expect when they are, as Dusty Springfield sang in 1964, “wishin' and hopin' and thinkin' and prayin'” for someone to contact them? Okay, that old Burt Bacharach-penned chestnut (RIP, Burt) wasn’t about M&A, but you get the idea. What moves a deal along from the wishin’-and-hopin’ stage to the “Holy cow — we’re doing a deal!” phase?

It should not surprise you to read that M&A, as a document-driven undertaking, just happens to use documents to handle this task as well. These two particular documents (different but nevertheless related) are commonly called the indication of interest (IOI) and the letter of intent (LOI). Sandwiched between these documents are meetings between the prospective buyers and the seller. For more on those meetings, see Chapter 11.

Examining the Indication ...