The bid-process instructions provided to buyers will set a deadline for them to submit letters of intent (LOIs).

The LOIs will be much more specific in nature than the IOIs in terms of transaction structure, purchase price, financing structure, closing conditions, and, often, key legal elements of the transaction.LOIs include both binding and non-binding provisions.

Typical nonbinding provisions include:

Transaction type (stock or asset deal)

Purchase price, consideration mix, and payment timing

The amount of net working capital expected at closing and how it will be calculated CEO and other key employee roles post-closing

A timeline for key milestones

Potentially, discussion of reps, warranties, and indemnification limitations

Binding provisions usually include:

Exclusivity / no-shop

Diligence access and cooperation

Sometimes, breakup fees

A statement that the buyer and seller are responsible for their own expenses

The seller, advised by its bankers and legal and other advisors, will review the LOIs and select the preferred bidder.