“You have wasted so much of our time”.
It was not true. Worse it was such an obvious untruth, meant to gas light our client. Worse than that even, it was a lie meant to empower and aggrandise the liar. It was meant to cover up the failures of the agent and give him a bit more space with his client.
We have helped our client build up a significant body of evidence in his business. It has growing sales, even faster-growing profits, and significant cash reserves. The staff complement is small, and the inventory holdings are well under control. The business happens to own the intellectual property of its biggest customers. It is a fantastic business.
An agent for an obvious acquirer has been looking at the business. He has conducted, what we were first told was a due diligence. In reality, it was little more than a stalling shuffle for an asset grab.
When my client refused the first suggestion on a takeover, the suitor asked for another chance. We prepared a bunch of supporting documentation to help him understand the value of what they were looking at. All that information went into the data room.
The second proposal was marginally better than the first. But it was also rejected. My client countered with something which reflected the requirements of the shareholders.
He put his proposal to the suitor who responded with a statement to the effect that he had wasted the time of the agent and his client. That was an interesting thing to say.
Virtual data room
Our client built his value proposition into one of our data rooms over an extended period. All the information necessary to make a decision about whether to acquire the business in one place. It is layered in its accessibility to different grades of interested parties. So a “prospect” has access to less sensitive data than an “investor”, who has less access than an eventual “new owner”.
Permissions can be granted and revoked easily. And when the deal is finally consummated, all the unsuccessful bidders and tyre kickers have no more access to the information. Ever.
So back to the suitor’s agent and the hissy fit. Had my client wasted his time? Actually no. You see, the virtual data room also has a very detailed history of which documents were viewed, at what time, and for how long. All the way down to page level. It also gives information about the level of interaction with the documents. Neither the agent nor his client had accessed the valuation arguments, for a single minute after they asked for a second chance.
The agent had based his bluster about the waste of time on a frustration. His client was unable to grab an asset. He did not want to pay fair value. There’s a lot of that going around. The jibe aimed at making our client feel bad was rubbish. We could prove that to him as he took a much better option.