Cold approaches are one of the most common drivers of M&A activity. Often, our first interaction with a business owner is when they have been contacted unexpectedly by a prospective buyer. Dealing with the approach correctly is key to maximising the chance of success and getting the best value for your business. Early interactions often set the foundations for the negotiations that follow, so handling the process correctly from the outset is critical.

Here, we’ve outlined what business owners should consider and the steps to take when a prospective buyer approaches you out of the blue.

Is now the right time to sell?

The first thing you need to consider is whether it’s the right time to consider a sale of your business. A buyer’s approach can be flattering but it can also be distracting, and it shouldn’t automatically trigger a sales process.

We often work with businesses that are in the process of developing new revenue streams, expanding capabilities, or entering new markets. These future growth opportunities may not yet be visible to an acquirer and, as a result, may not be reflected in their initial thinking on value. Our role is to help articulate that story clearly and, where appropriate, structure a transaction that recognises both current performance and future potential.

Timing considerations may also include:

• Whether recent or upcoming investments have had time to mature

• The strength and sustainability of current trading

• Management succession and internal readiness for a transaction

• Wider market conditions and sector appetite

At this stage, it is also essential to understand who has approached you and why. We can help you assess the buyer’s motive, whether the approach is genuine, and, most importantly, whether they have the financial capacity to complete a transaction at the level implied. Don’t be afraid to ask questions before progressing; validating the approach early can save considerable time and risk later on.

Let the buyer lead the way

There is a reason the buyer has approached you rather than the other way around, and that dynamic should be reflected in how discussions progress. Early actions will set the precedent for the nature of negotiations to follow, so resist the temptation to rush ahead or over‑engage too soon.

Before any meaningful discussions take place, a confidentiality agreement should be put in place. We’d expect this to come from the buyer, but ultimately, it’s your information and should be on your terms. The agreement should be robust, clearly defining what information is confidential and how it can be used.

Putting the onus on the buyer to make headway not only protects you but also helps you gauge their seriousness and preparedness. A well‑prepared acquirer should be willing to invest time and effort at this early stage.

Share information wisely

It’s important to consider at what point you share sensitive information: one of the most common mistakes business owners make is sharing too much information, too early.

Remember that anything you share can still benefit a potential buyer even if the deal does not progress – particularly by giving them insights into your customers, pricing, strategy, or capabilities. In some cases, that information can even be held in evidence against you in later negotiations.

Don’t feel pressured to share anything too early, instead, release it in stages as the process progresses. That’s why it’s crucial to validate the buyer’s intent and manage disclosure appropriately before providing any sensitive details. In addition, you should take time over the presentation of numbers and ensure your business is shown in the best possible light. There is always a positive story to tell, even if it may not be immediately obvious.

Managing disclosure carefully helps protect value and ensures that sensitive insights are only shared when there is sufficient confidence in the buyer and the process.

Never disclose your price expectations

Because the buyer has approached you, it is for them to decide what your business is worth. Disclosing price expectations too early can anchor negotiations at a level that does not fully reflect value.

Even where a headline price has been discussed or agreed, transactions contain many subtleties: deal structure, earn‑outs, deferred consideration, warranties, and conditions can all materially affect the outcome. It’s easy for those less experienced to give away value without realising so seeking professional advice at this point (if you haven’t already) is key.

An experienced adviser will help you maintain leverage, assess the true economics of any offer, and ensure that value is protected throughout the process, not just at the headline level.

Part ways on good terms

Not every approach leads to a transaction, and that’s perfectly normal. If discussions do not progress, you should ask the buyer to either return your confidential information or confirm that it has been destroyed, in line with the confidentiality agreement.

Just as importantly, aim to end the discussions on good terms. Markets are small, and circumstances change. Today’s rejected buyer could become tomorrow’s serious acquirer (or even a useful contact) under different conditions.

Get in touch

If you’ve been approached by a prospective buyer, our team can help you assess the approach, understand the buyer’s intent, and stay in control from the very start of the process. Whether or not a sale ultimately proceeds, the right advice early on can protect value and reduce risk.

Please fill in the form below and a member of our team will be in touch.