Commonly, during the M&A process the power shifts from the buyer to the seller back and forth many times. This usually depends on which party has more riding on a particular stage of the deal. As a result, the power balance in a deal is constantly shifting.

When a buyer and seller negotiate a valuation, both sides want to see the deal close with that valuation in mind. However, one side or the other might want to try to begin renegotiations of the sale price before closing. Sometimes if it is the buyer’s renegotiation of the valuation, he is doing so in order to get a lower price.

The letter of intent (LOI) is a document where the buyer and seller agree to stop pursuing other potential business prospects and agree to wrap up the deal. The Letter of Intent creates provisions for both sides of the deal.