What should a potential acquirer require a seller to do upon entering serious negotiations?

When entering serious negotiations, it is common for a potential acquirer to require a seller to stop soliciting other buyers. This is crucial in ensuring that the negotiations remain exclusive, allowing the acquiring party to engage in discussions without the pressure of competing offers or competing companies potentially intervening. An exclusivity agreement helps the acquirer to invest time and resources into the due diligence process, reorganizing their strategic plan based on the potential acquisition.

This step is often essential to build trust between the parties and to facilitate open communication about sensitive information that could impact the valuation and structure of the deal. It also implies a commitment from the seller to consider the offer seriously without distractions from other potential suitors, giving the acquirer a clearer path to negotiation and decision-making.

The other options—such as increasing the asking price, lowering confidentiality obligations, or extending the negotiation period—do not align with the typical requirements in serious negotiations, as they would either complicate the process or undermine the integrity of the discussions.