We signed an LOI with a forty five day exclusivity period, but the buyer is dragging their feet on due diligence and we suspect they are trying to exhaust us into accepting a lower price. How do we handle this timeline stall without losing our leverage?

Question

Tyler Smith · Accepted Answer

This is a classic buy side tactic known as retrading. The buyer intentionally slows down the due diligence process to exhaust your leadership team, hoping that as the exclusivity expiration approaches, you will accept a lower valuation just to get the deal done. You must break this momentum immediately.

First, run your transaction pipeline like a Level 10 Meeting. Set clear weekly milestones for the buyer diligence requests and track their progress publicly in your data room. If the buyer misses a deadline, call it out on your weekly call. Second, make it clear that exclusivity is a privilege, not a right. Send a formal written notice thirty days into the period stating that because they have failed to meet the agreed upon diligence schedule, you will not extend the exclusivity period by even a single day. Let them know that on day forty six, your advisory team will immediately re-engage with the runner up bidders. This shifts the pressure back onto them.

To maintain your leverage, keep your business running at peak performance. Do not let your leadership team lose focus on their quarterly Rocks. If your revenue and pipeline continue to grow during the diligence process, the buyer loses all their renegotiation leverage. They will realize that stalling only makes the business more expensive to buy, which forces them to move quickly to close the transaction on your terms.