Turning One Unsolicited Offer Into a Competitive Sale

The situation

Rosa, Sandro, and Cristina inherited equal shares in their father's manufacturing business in Oakville after he passed away two years earlier. None of the three had run the company day to day. Rosa worked as an administrative assistant, Sandro worked as a security guard, and Cristina lived out of province. A general manager had kept operations running since the transition, and the siblings had been content to let the business tick along, splitting modest annual distributions three ways.

That changed when a letter arrived from a competing company in the same industry. The letter proposed to buy the business outright for an amount at the low end of what the siblings vaguely understood their father's company might be worth, and it asked for a response within three weeks, before the offer would be withdrawn. None of the three had ever been through a business sale. They came to Treadstone Law with the letter in hand, unsure whether the number was fair and unsure what would happen if they simply said no.

The problem

An unsolicited offer that arrives with a short deadline is a recognizable pattern in business acquisitions, and it is not usually accidental. A buyer who approaches a target directly, before any broker or advisor is involved, is trying to negotiate against sellers who have no basis for comparison and no competing bidders pushing the price up. The artificial deadline compounds the problem: it discourages the sellers from taking the time to get the business properly valued or to test whether other buyers might pay more.

The siblings' situation made them particularly exposed to this dynamic. As family shareholders who had inherited the business rather than built it, they had no established relationships with other players in the industry, no sense of what similar companies had recently sold for, and no experience reading a letter of intent — the non-binding document that typically sets out a proposed purchase price and key deal terms before a formal purchase agreement is drafted. The letter they had received used confident, specific language that made the number sound like a market rate rather than an opening bid designed to be accepted quickly.

There was also a real risk on the other side: doing nothing was not free. The general manager keeping the business running was not a permanent solution, and the siblings could not agree among themselves on a long-term plan for the company. A poorly run, drawn-out process could cost them a workable deal altogether, and disagreement between three shareholders with equal shares meant any path forward needed all three aligned.

What we did

1. Slowed the clock down first. The three-week deadline in the unsolicited letter had no legal force — it was a negotiating tactic, not a binding term. We advised the siblings to respond promptly but not to accept or reject anything, instead acknowledging interest while making clear that a decision of this size required proper review. This bought time without signalling weakness or disinterest to the buyer.
2. Arranged an independent valuation. Before any negotiation could be meaningful, the siblings needed to know what the business was actually worth. We connected them with an independent business valuator who reviewed the company's financial statements, order book, and industry comparables. The valuation came back materially higher than the unsolicited offer, giving the siblings a defensible number to negotiate around instead of guessing.
3. Ran a limited, confidential sale process. Rather than negotiating one-on-one with the original bidder, we worked with the siblings to approach a small number of other plausible buyers — companies in the same or adjacent industries likely to see strategic value in acquiring an established operation. Each was approached discreetly under confidentiality agreements, so employees, customers, and suppliers were not disrupted by the prospect of a sale before anything was finalized.
4. Structured competing letters of intent. Once more than one party expressed interest, the siblings were no longer negotiating in isolation. We helped them request letters of intent from each interested buyer on a common timeline, so the offers could be compared on the same basis — price, deposit, conditions, and proposed closing date. The original bidder, on learning that other parties were reviewing the opportunity, submitted a substantially improved offer rather than risk losing the deal entirely.
5. Negotiated the winning letter of intent's key terms. With three credible offers on the table, we negotiated the non-binding terms of the strongest one before moving to a formal purchase agreement — addressing price, the size of the deposit, the conditions the buyer could still rely on to walk away, and a reasonable but firm timeline. Locking these points down early prevented the buyer from softening the deal once exclusivity was granted.
6. Guided the siblings through governance decisions. Because Rosa, Sandro, and Cristina held equal shares, any final decision needed unanimous agreement. We helped them agree in advance on their minimum acceptable price and key deal terms as a group, so that once an offer met that bar, none of them would be negotiating against the others under pressure from the buyer.

The outcome

The competing process worked as intended. The original bidder's revised offer, made once it understood other buyers were involved, came in significantly above its first proposal — the final purchase price landed within the roughly $8 million to $15 million range the independent valuation had supported, well clear of the number in the original unsolicited letter. The siblings accepted that offer, and the transaction proceeded to a formal share purchase agreement and closing over the following months.

The difference between the first offer and the final price reflected exactly what the sale process was designed to capture: the gap between what a single motivated buyer will pay when it believes it is the only option, and what the same buyer will pay once it knows it is competing. Rosa, Sandro, and Cristina each received a share of the proceeds substantially higher than what the original letter would have delivered, and the sale gave all three a clean resolution to a business none of them had been positioned to run long-term.

The general manager who had kept operations stable through the process was retained by the buyer post-closing, which mattered to the siblings — their father had built relationships with his staff, and an abrupt transition would have unsettled a workforce that had already been through one change in ownership.

Closing itself took several months from the point the winning letter of intent was signed, as the buyer completed its due diligence review of the company's contracts, employment arrangements, and financial records, and as the purchase agreement was negotiated in detail. None of the three siblings had expected the process, from the original letter to final closing, to take as long as it did, but each stage served a purpose: verifying the number the valuation had suggested, giving other buyers a genuine chance to compete, and giving the eventual buyer confidence in what it was purchasing before money changed hands.

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