If a buyer approaches you, do not rush into sharing information. Find out who they are and why they are interested, check their credibility and ability to fund a deal, and put an NDA in place before anything sensitive is shared, releasing detail in stages. Understand your likely value range before discussing price, avoid becoming dependent on one buyer too early, and consider whether to test wider interest. Bring in advisers before any offer is negotiated.
Do not rush into disclosure
An unsolicited approach can be flattering, and it is natural to want to respond quickly. There is no obligation to share anything, and it is reasonable to say you are open to a conversation without committing to sell or providing figures.
Why approaches happen
Buyers research businesses that fit their plans, and approaches can arrive when an owner has not considered selling. Ordinary changes, such as a management change, a growth plateau or an expansion into a new area, can prompt interest. An approach does not mean anyone believes you are selling, and responding does not commit you.
What a credible approach looks like
Signs that an approach is considered rather than speculative:
- The buyer has researched your business and can explain why it fits.
- There is a clear reason for interest, such as customers, capability or geography.
- There is no pressure to decide or share information quickly.
- They accept a 'not now' or 'no' without pressing.
- They are willing to discuss what would happen to your team, the business's name and your own future role.
Understand who the buyer is and why they are interested
Establish the company behind the approach, the person's role and whether they can speak for it. An intermediary should be able to say who their client is, at least once confidentiality is agreed. Ask what the buyer is trying to achieve; a vague answer may mean they are gathering market information.
Check credibility and funding
Public filings at Companies House can show a company's size, ownership and past acquisitions. Ask how a deal would be funded. A buyer who cannot or will not explain this should not receive sensitive information.
Use an NDA and staged disclosure
Before sharing anything that is not public, ask for an NDA. Then release information in stages, starting with a summary and moving to detail only as interest firms up. An NDA creates obligations and possible remedies; it does not remove the risk, so staged disclosure still matters.
Assess the strategic rationale
Consider what the buyer would gain and how they would run the business. A buyer whose rationale is clear is more likely to make a serious offer and to complete. A buyer who could use the information competitively deserves extra caution.
Know your likely value range first
Before price is discussed, form a realistic view of value based on maintainable earnings and the risks a buyer will see. Without one, it is hard to judge whether an approach reflects the business's worth, and easy to anchor on the buyer's first figure.
Avoid single-buyer dependence too early
Dealing with one buyer alone gives them more control over price and timetable. Agreeing exclusivity early, or letting talks run for months without a clear plan, can leave you with few alternatives if terms change.
Consider testing wider appetite
An approach can be a prompt to find out whether other buyers would be interested. A confidential, targeted approach to a small number of other credible acquirers gives a basis for comparison without advertising the business.
Confidentiality, staff and customers
Keep the circle of people who know small. Hold early meetings away from the business where possible. Think about when key staff might need to be involved; rules on informing and consulting employees can apply in some transactions, and your solicitor can advise.
When to bring in advisers
Advisers are most useful before an offer is negotiated: an M&A adviser to assess the approach and, if appropriate, test wider interest; an accountant on value and tax; and a solicitor on the NDA and any Heads of Terms.
- Guide: A buyer is interested, what happens next?
- Guide: What is your business worth before you approach buyers?
- Start a confidential review
Frequently asked questions
Should I respond to an unsolicited offer for my business?
It is usually worth a polite, non-committal response if the buyer looks credible. You do not have to share information or agree to sell.
Should I share my accounts with a buyer who approached me?
Not until you know who they are, why they are interested and how they would fund a deal, and an NDA is in place. Even then, share in stages.
Does an approach mean my business is worth what they say?
Not necessarily. Form your own evidenced view of value before discussing price, so you can judge whether the approach reflects the business's worth.
Should I talk to other buyers if one has approached me?
It is often worth considering. A confidential approach to a small number of other credible buyers can provide a basis for comparison.
When should I involve a solicitor?
Before signing an NDA you have not drafted yourself, and certainly before agreeing any Heads of Terms or exclusivity.