The rise, the allure, and the risk of unsolicited acquisition offers

The last few years have seen an unprecedented number of buyers reaching out to businesses directly in the hope that they can freeze out competition. Huge unsolicited acquisition offers for the likes of Direct Line and Google Chrome have hit the headlines recently, but it’s also been a common occurrence for businesses of all sizes.

What’s driving this eagerness, should you be excited by the prospect of your business being next, or is the rise of the “cold buyer” something to be wary of? Read on to find out, or if you’d prefer to hear the answers, don’t miss out on our webinar: You’ve been approached by a buyer – now what?

The rise of unsolicited acquisition offers

In the UK alone, according to the British Private Equity & Venture Capital Association (BVCA), dry powder managed by private equity and venture capital funds increased to £190 million this year. Investors know that money of any size – no matter how small – can be used to make more, so having resource of this magnitude sat idle, is not ideal.

Private equity firms are therefore feeling the pressure to grow investor money. At the same time, relatively low interest rates are creating borrower-friendly market conditions, making leverage buyouts more feasible.

The allure of acquisition offers

For many, the idea that there’s a flood of suitors looking to buy their business could sound like great news. After all, businesses are often formed with a successful exit in mind.

It’s therefore of no surprise that someone pitching a purchase for millions of pounds to expand out their portfolio and drive growth can be very alluring. So too is the prospect of private equity taking a stake and providing levels of investment previously unseen, promising supercharged growth and an even greater business value when you completely exit in the future.

There are also other attractions to selling your business to those who approach you directly:

• Exclusivity with one buyer makes negotiations one dimensional (however, that comes with its own drawbacks)
• On paper, the deal could take less time as the buyer has already shown intent
• Aside from lawyers – who are a legal necessity during a merger or acquisition – a direct sale will involve fewer third parties, presenting a cost saving (however, minimal savings don’t mean much when you lose out on securing a far greater sale price)

Like most situations which sound too good to be true though, this is yet another instance.

The risk of unsolicited acquisition offers

Despite the allure of unsolicited acquisition offers and the increase in the volume of them, a trend isn’t always one to jump on. Especially when upon closer inspection, cracks begin to form. For instance:

• Although 50% of deals are now closed via this method, most go through revisions, with prices usually lowering. That’s why when we work with clients looking to sell their business, nine times out of ten, they end up selling to a new buyer for a greater price.
• Although sell-side advisors add a cost to a sales process, when done properly, they add value. Here at Initium, on average, we secure a sale price which is 15% higher than the first offer which business owners receive.
• Although exclusivity gives the illusion of an imminent sale, it counts for nothing. Plus, if negotiations collapse, after a lot of time and effort, having not sourced and nurtured additional prospective buyers, you will be back at square one.
• Although a sudden windfall of large sums of money can sound brilliant, they can also easily blindside business owners from other important factors. However, over 35 years of M&As, we have witnessed that legacy such as the continuation of company values and the future of employees are often high on the list of priorities for sellers – factors which we work hard to secure.
• Although working with just one buyer means that only one set of due diligence must be done, it remains a task which must be done thoroughly, typically taking 2 – 3 months to complete. Yet it can unfortunately sometimes take longer. Working with business owners to sell their companies, we know that due diligence is usually an activity new to them and that they therefore find benefit in our guidance on the process. However, when attempting to sell to a buyer who taps you on the shoulder and locks you into exclusivity, sell-side advisors such as ourselves are usually absent, meaning that there is a real risk that the due diligence part of a potential sale can drag even to the extent of seeing a deal breaking down over delays.

Ultimately, whilst unsolicited acquisition offers might not be risky, they are highly likely to undervalue your business. DPS Software found themselves in this very situation prior to assigning us as their sell-side advisors. The result? By running a highly competitive but controlled sales process, several offers were sourced, and the eventual sale was 2.4x higher than their first offer.

“Unsolicited acquisition offers are often opportunistic. Their very nature tells you two things; one is that your company has value as it is worth acquiring, the second is that buyers’ wish for exclusivity shows that they know others would be interested. That’s why it’s always worth exploring your options.”
Simon Glover, Associate Director, Initium

What’s your best option?

So, what should you do when an unsolicited offer lands on your desk? How do you know if an offer on your business is a good offer?  The best course of action is to keep your options open.

As sale-side advisors to business owners, our priority is to help them achieve the best possible value from the sale of their company. Equally, we aim to ensure they feel confident and satisfied with their decision – recognising that true success extends beyond financial outcomes.

When options are stark, owners might feel that they don’t have the luxury to sell to those who share the values which they built their business upon. However, the reality is that many will continue to care about their company even after they exit. Paired with wanting to ensure that they sell it for the greatest value possible, making sure they have options – a range of prospective buyers – at their disposal is therefore imperative.

Ultimately, you’ll never really know whether an offer on your business is a good one unless you run a competitive sale process.

Join us on 10th December

If you’re a business owner who falls into that category, along with an exit plan, you will also need a plan of what to do when acquirers approach you (it could already be happening).

So, to help you prepare for when alluring acquisition offers come knocking, at Initium we’re hosting a webinar: You’ve been approached by a buyer – now what?

You will learn:

• How to distinguish genuine intent from casual interest
• The critical mistakes NOT to make when responding
• How preparation, process, and perspective can influence your next move
• What options you have available
• And more…

…all on 10th December 2025 by signing up here!