Deal Process
Seller-side
Important
A, X
Pre-LOI
Completed
The Process Letter: How Sellers Control a Competitive Sale
Learn what a Process Letter sets out in a competitive UK business sale, why it's the cheapest way to protect price, and what happens to sellers who run a sale without one.
The 30-Second Definition
A Process Letter is the document issued by the seller, or their adviser, to prospective buyers at the start of a competitive sale.
It sets out the rules of engagement: the timetable, what information will be provided and when, the format required for indicative offers, and the deadline for submission.
What It Typically Includes
A standard Process Letter covers the process overview, key dates (Information Memorandum distribution, management presentation slots, data room access, first-round bid deadline, and the date by which exclusivity will be decided), the required bid format (headline price, proposed structure, evidence of funding, and any conditions attached to the offer), a confidentiality reminder, and a contact protocol — typically a strict instruction that buyers must not approach management, employees, or customers directly without the seller's permission.
Why It Matters
Without a Process Letter, buyers each set their own pace. The slowest, most cautious buyer ends up dictating the overall timeline, while the seller loses control of the single biggest lever available to them in a sale: timing.
Running multiple buyers through identical deadlines in parallel is what creates and sustains competitive tension — and competitive tension is what drives price.
The Common Mistake
Founders running an informal sale process — particularly one that started as a single approach rather than a planned auction — often end up negotiating sequentially with one buyer at a time.
By the time a second buyer is engaged, the first has often already extracted concessions, and competitive tension has effectively collapsed before it had a chance to work in the seller's favour.
GRAX Connection
Process control during Exit — and recognising a well-run process from the buy-side during Acquire — is one of the cheapest interventions available to a seller. It costs nothing to issue a Process Letter, but it fundamentally changes the negotiating dynamic of the entire sale.
This entry is for general information only and does not constitute legal, financial, or tax advice. Founders should take specific professional advice before acting on any of the points covered here.
