Which two documents are used interchangeably to convey acquisition offers from buyer to seller?

The letter of intent and term sheet serve as preliminary documents in the M&A process that outline the basic terms and conditions of a potential acquisition.

The letter of intent (LOI) is typically a written statement expressing the intention of the buyer to acquire the seller, detailing the proposed purchase price, the scope of the acquisition, and any conditions that need to be met to proceed with the deal. It often serves to establish a framework for negotiating the final agreement while signaling serious intent to both parties.

On the other hand, a term sheet is a more detailed document that outlines specific terms and conditions of the deal, including structure, valuation, timelines, and any contingencies that must be addressed before the deal can be finalized. It essentially captures the main points of the negotiation prior to drafting more formal agreements.

Using either the letter of intent or the term sheet can help guide discussions and negotiations, which is why they are seen as interchangeable in the context of conveying acquisition offers. Both documents are intended to provide clarity to both parties about the key components of the proposed transaction, setting the stage for further discussions and the eventual drafting of definitive agreements.

In contrast, options that involve acquisition agreements, purchase orders, contracts, or memorandums of understanding typically represent more formal