When I sold my company, our own advisers (not Goldman but a famous name) did something which in my opinion is much worse -- I'm 99% sure they told the winning bidder that we'd been prepared to accept a 20% lower bid from their competitor. The winning bidder, of course, then suddenly reduced their bid by 20% on the planned day of completion. The reason our advisers did this is that it was much more important to them to get future business from the buyer, a large multinational, than future business from me and my colleagues.
I feel sorry for the vendors in this case, but you don't do an all-share deal without being extremely cautious about the shares you're taking as payment. Even a pair of PhDs should have known that.
What interests me here is that we have a lot of news stories floating around at the moment lambasting financial companies for relatively minor misdeeds, because that's all journalists can pin on them without getting sued. If the real truth about what goes on begins to leak out the public reaction could be very interesting.
> don't do an all-share deal without being extremely cautious about the shares you're taking as payment.
This.
Cash is king. Unless your acquirer is Intel, Google, Apple, Microsoft, Amazon or anyone of the other big boys.
One must remember: If someone is swapping their stock for yours - then they, by definition, value their stock less than they do yours. That's a losing deal in anyone's books. If they say they need the cash for growth - call BS - since if they grow that fast they should hold onto every last bit of their stock.
On the other hand that's a standard negotiating ploy.
How many times, when buying a car, are you minutes from closing the deal when suddenly a new fee appears. Or suddenly an issue with your trade-in and it's not worth what they "thought" it was. It only changes your monthly payment by $10... do you really want to walk away after the effort you've put in to this point?
So not necessarily anything nefarious going on (though not discounting the possibility entirely).
> do you really want to walk away after the effort you've put in to this point?
Can you afford not to? The company you're dealing with has now proven to be unwilling to stick to the points you spent all that time negotiating. They're counting on you conceding the $10 because it's easy.
Unless you show that you're willing to walk away and start all over from scratch (preferably with someone else), they'll push as hard as they think they can get away with.
I feel sorry for the vendors in this case, but you don't do an all-share deal without being extremely cautious about the shares you're taking as payment. Even a pair of PhDs should have known that.
What interests me here is that we have a lot of news stories floating around at the moment lambasting financial companies for relatively minor misdeeds, because that's all journalists can pin on them without getting sued. If the real truth about what goes on begins to leak out the public reaction could be very interesting.