Quote:
Originally Posted by Damien
It is but this is what is done as part of due diligence before you commit to buying. It's weird he is at this stage and now he suddenly wants to do it.
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Not at this scale of purchase. Due diligence can be highly complex and can’t be hidden, nor can it be done when the potential purchase becomes public and the market is all ‘will they won’t they’. That sort of volatility is undesirable and likely to attract unwelcome attention from the market authorities. If you keep people guessing about whether a purchase will go ahead, eventually it starts to look like share price manipulation.
Any offer to make a very large purchase is subject to due diligence. We all do it at some time in our lives - a house purchase offer is always subject to satisfactory surveys. Even if the home report is available from the outset, various other searches have to be done and in some cases special surveys of the electrical or gas systems may take place.
Back in the day when I worked for a major international hotel company, it announced an agreed offer to purchase a large regional hotel chain which itself had well over 100 hotels. For the next 3 months, every senior executive in the place was on the road, visiting every single one of the hotels to establish that they were all there and in satisfactory condition.
Obviously there are certain things that you can, and should, satisfy yourself about before you make the offer, but there’s plenty that you can’t - especially proprietary details that the company being bought can’t and won’t give out to just anyone.