Sell-side Initial Bid Process Letter

Summary

This template is an initial bid process letter containing instructions typically sent by a seller's investment bank advisors to the initial bidder pool in a merger and acquisition auction. This template includes practical guidance and drafting notes. The template describes the items that bidders must include in their initial indication of interest to successfully move on to the second round of bidding in an M&A auction. For this initial round, bidders typically have not performed meaningful due diligence at this stage of the auction. Bidders must rely solely on information presented to them by the investment bankers in a marketing teaser and confidential information memorandum. Accordingly, this template is intended to elicit from the bidding pool those bidders who are within the anticipated valuation range the seller and investment bank expect a transaction to yield. This template assumes a seller is auctioning 100% of the total equity of the target company. The template would need to be tailored for the contemplated transaction structure. For more on bid process letters and the auction process generally, see the Auction Process in M&A Deals practice note.