Experiences in renegotiating LOI

searcher profile

July 08, 2023

by a searcher from Universidad de La Coruña in London, UK

Hi all!

I would love hearing experiences and ideas from those who have ever engaged in renegotiation of the original LOI (serious changes in the price and/or structure, not just contingencies or 5% reduction).

Also, has anyone engage with a negotiation advisor or coach looking for support during the process?


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commentor profile
Reply by a searcher
from University of Tennessee in Nashville, TN, USA
The instances where I have been a party to a renegotiated LOI have usually come after diligence has uncovered new information or identified material differences in information provided about the business. In those instances, I/we have requested a meeting with the Seller (and Advisor, if represented) that 1) explains the base assumptions made for the original LOI, 2) explains the new discoveries and/or discrepancies that materially conflict with the assumptions made, and 3) presents the proposed modifications to the LOI necessary to continue the transaction.

I highly advise that the tone of the meeting be respectful and without accusation if you do not suspect an intent by the Seller to deceive. Let the data speak for itself. I also advise against requesting a meeting with the Seller and Advisor without a thoughtfully-crafted modification request. There may be a need to address multiple identified issues (financial, operational, etc.). The ideal tactic is to address all issues in a single meeting; the fewer the meetings the better. A Seller will tire (and possibly become hostile) of multiple modifications meetings and will be less receptive to additional modifications after agreeing to/conceding previous ones.
commentor profile
Reply by a searcher
from Colorado State University in Centennial, CO, USA
I agree with Richard, this is common place and I am going through it on a deal right now. Happy to chat with you and help you game plan based on the circumstances you are dealing with.
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