Use a consistent basis
Start by identifying what each proposal covers. A price for shares and a price for selected assets may include different obligations, cash balances or working-capital arrangements. The comparison needs to explain those differences before treating the figures as alternatives.
Grafton can assemble the commercial terms from offer letters, draft agreements and the accompanying assumptions. The document should identify its source and status. A point still under negotiation needs to remain separate from a term that the parties have agreed.
Separate the forms of payment
| Payment form | Commercial question | Material to locate |
|---|---|---|
| Cash at completion | What must be satisfied before the cash becomes payable? | Completion conditions, funding arrangements and any price-adjustment mechanism. |
| Fixed deferred payment | When is the amount due, and what can affect its payment? | Payment schedule, obligations of the payer and questions for counsel about protection and remedies. |
| Payment tied to later results | Which performance measure determines the amount, and who controls the activities behind it? | Calculation definitions, measurement period, operating assumptions and arrangements for reviewing the calculation. |
These are commercial questions, not conclusions about enforceability or value. Different forms of payment should not be added together as if each has the same timing and certainty. Legal and financial specialists address the opinions or advice their disciplines require.
Read the conditions alongside the timetable
A proposal can depend on financing, due diligence, a third-party consent or another event. Some conditions are within the parties' control; others require a separate response. The board should be able to see the dependency and the date on which it becomes relevant.
We distinguish the timetable proposed by the buyer from the work needed to meet it. If an important document has not been supplied or an approval route is unresolved, the comparison identifies that gap. It should not turn a target completion date into an agreed commitment.
Keep the board's alternatives in view
An offer review may need to compare two proposals, a revised proposal and the existing position, or a transaction with a decision to continue independently. The alternatives are defined with the board. Their commercial assumptions should be visible on the same basis.
The resulting paper can explain where one proposal offers a different payment profile, leaves a continuing obligation or depends on a condition another proposal does not. It also identifies the further information that could change the assessment.
For the broader assignment scope, see acquisition offers.
Related commercial notes
Contact Grafton about the company and proposal under consideration.