LOI issue with exclusivity

by a searcher from University of Applied Sciences

1 year ago

Hi everyone, I am negotiating a LOI with a seller. We are quite advanced, but he confirmed that he has one other highly interested potential buyer which he does not want to shut off. So he is having trouble with the exclusivity agreement in the LOI. After a management meeting I am confident that I would be the preferred acquirer from a personal fit standpoint, but the seller is worried that I am not able to raise the required financing, which is a fair point as of now I have only verbal confirmation from the bank and a few early co-investor talks. The "chicken-and-egg" issue is that the bank will only move forward with the confirmatory financing process once I can provide a signed LOI. 
How would you maneuver this? 

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searcher from University of Applied Sciences

Thanks for the idea Monica! I lost the deal in the end and put my search on hold, but now actively searching again and already close to a a new LOI

2 weeks ago | like reply | 0 likes

searcher from City University of New York, Brooklyn College

Maybe you could shorten the exclusivity period to two or three weeks instead of the usual one to two months. This would give the seller more flexibility, so even if the deal falls through, they won’t lose too much time.

2 weeks ago | like reply | 0 likes

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