M&A Buyers: Pay Us a Fee and We'll Consider Buying You

The M&A market sure is different when it consists entirely of sellers. Sovereign Bancorp (SOV), market cap $1.9 billion, says it turned down a $4 billion buyout offer last month. I can’t say as I blame it:

Sovereign’s board received the bid Nov. 11. But the investment group did not identify any source of financing and requested that Sovereign pay significant fees before Party A was willing to engage in any discussions. For example, Party A requested that Sovereign pay a “transaction initiation/work fee” of $10 million to perform due diligence, the filing said.

I don’t remember reading about “transaction initiation/work fees” back when PIK toggles were all the rage.

Comments

[Richard Col...:]

Good for Sovereign. There's enough con artist out there trying to steal your money without paying them a fee to consider buying your company, Sounds like a Time Share wanting a fee to sell your Time Share.

2008 Dec 18 10:33 AM