You’ve been approached by a buyer – now what?
A Practical Guide for Business Owners Navigating an Unexpected Offer
For many business owners, the moment a buyer expresses interest in acquiring your company can feel both exciting and unnerving. Whether it’s a casual conversation over coffee, a message on LinkedIn, or a formal letter from an advisor, that “tap on the shoulder” often comes without warning. And while it may be flattering, it also marks the beginning of a process that – handled incorrectly – can lead to missteps, lost value, and avoidable risk.
Our recent webinar, You’ve Been Approached by a Buyer – Now What?, was hosted by Mark Bentley, Client Development Director at Initium, alongside two of our most experienced senior leaders:
- Jonathan Dunn – CEO
Jonathan has 25+ years of experience in the UK and international M&A market, the last 15 of which have been at Initium. Having completed transactions of every shape and size, he brings deep insight into buyer behaviour, value dynamics and the strategic considerations that sit behind every successful sale. - Andy Denny – Managing Director of Transactions
With over 20 years at Initium and involvement in around 80 completed transactions, Andy specialises in guiding entrepreneurs through what is often the most important financial event of their lives. His expertise lies in negotiation strategy, preparing businesses for scrutiny, and helping sellers avoid costly missteps.
Together, they unpacked the realities behind unsolicited approaches and shared case studies illustrating the opportunities and risks business owners face at these pivotal moments. Below, we’ve distilled the critical lessons every business owner should know.
1. A direct approach doesn’t mean you should say “yes” immediately
Buyers typically make direct approaches for one main reason: to gain control of the process. By engaging you in a one-to-one conversation, they hope to limit competitive tension and reduce the chance you’ll speak to other potential acquirers.
In many cases their motives are genuine – they see strategic fit, want to move quickly, and believe they can create value through acquisition. But an unsolicited offer is still a moment to pause, not pounce.
“You’re flattered, you’re interested – but you need time. A buyer that’s genuinely serious won’t object to you taking a step back to consider a decision of this magnitude.”
– Jonathan Dunn
A simple, professional response such as “Thank you, we’re flattered – this is a big decision and we need some time to reflect” is often enough to reset the pace.
2. Beware the common pitfalls business owners make
When an owner engages too quickly and without advice, two issues arise time and time again:
Oversharing commercially sensitive information
Without experience of market norms, sellers can unintentionally hand over customer lists, margin data, or operational details – sometimes to a direct competitor.
“There’s a real possibility you may end up sharing more information than you might like – sometimes even commercially sensitive data with a competitor.”
– Andy Denny
Buyers may ask for top-customer information to test concentration risk, but this does not mean customer names must be disclosed.
Accepting a headline number at face value
A large headline offer can be seductive, but it may mask earn-outs, stretched payment terms, or assumptions the buyer hasn’t fully validated.
One owner approached with a £30m offer ultimately sold for £80m through a structured process – proof that first offers rarely reflect true market value.
Another example saw an attractive indicative offer fall apart once it became clear the buyer misunderstood the target’s partnership structure and future remuneration obligations. Had this surfaced later in due diligence, the price would have been “chipped” far more aggressively.
“Never assume the first offer you get is the only offer you might get from them.”
– Jonathan Dunn
3. The power of competition – real or perceived
If one buyer is interested, chances are others will be too. Sometimes opening up the market dramatically raises value; sometimes the mere possibility of competition is enough.
In one FMCG deal, Initium raised the offer by 60% simply by signalling that a broader process would begin if the buyer couldn’t sharpen their pencil. They responded decisively – no competition was required.
“Choice creates value. Widening the market is how you avoid leaving value on the table.”
– Jonathan Dunn
Whether through a full competitive process or a well-managed negotiation, widening the field ensures you maximise both value and certainty.
4. Keep the original buyer warm while exploring options
Many owners worry that stepping back or considering other buyers will jeopardise the initial interest. In reality, serious acquirers understand this is a once-in-a-lifetime event for the seller.
Communicating openly – “We’ve appointed advisors; we will revert once we’re prepared” – signals professionalism and strengthens your position.
“You handle it respectfully and honestly. Serious buyers understand that sellers want to explore their options properly.”
– Andy Denny
Even in complex situations, such as when the initial buyer is also a major customer, a carefully managed process can maintain commercial relationships while still enabling the seller to secure the best outcome.
5. Preparation is protection
Before agreeing heads of terms, owners must:
- Understand the true basis of the offer
- Ensure financial information is robust and presented correctly
- Test the buyer’s capacity and funding certainty
- Establish the right timing from both a personal and business perspective
Professional preparation avoids surprises and dramatically increases the likelihood that the deal completes at the agreed valuation.
6. What should a business owner do first?
If you’ve been approached:
- Pause – Don’t be rushed.
- Protect – Limit information until you have guidance.
- Prepare – Benchmark the offer, understand your options, and gather the right data.
- Partner with advisors – Selling a business is too important to navigate alone.
As Jonathan and Andy both stressed, even sophisticated buyers make mistakes in their assumptions, and unadvised sellers often bear the cost. Ensuring clarity early is essential.
Final thought: an approach is an opportunity – but only if managed well
Every business is different, and there is no universal playbook for selling. But one constant remains: direct approaches should always prompt a strategic, considered response – not a rushed one.
If you’ve been approached by a buyer and want to understand your options, we’d be delighted to speak with you. At Initium, we’ve spent more than 35 years helping entrepreneurs realise the full value of their life’s work – on the right terms, at the right time, and with confidence.
To watch the webinar, click here.