Key insights:
- Unsolicited acquisition approaches tend to remove competitive tension, which is one of the key price drivers in M&A.
- Sellers without advisers typically leave value on the table compared to those who run proper processes.
- Competitive processes usually deliver premiums; academic research demonstrates that introducing even one extra bidder can materially raise deal valuations.
- While exceptions exist (such as distressed assets or high confidentiality needs), an independent valuation remains a solid way to test and defend the fairness of the terms.
It usually arrives as an email in a flattering tone, under a subject line such as “Exploring partnership opportunities.” A prominent private equity firm has been “following the company’s impressive trajectory” and wants to explore a potential partnership. Sound familiar?
The next steps usually involve a low-key coffee meeting to discuss possibilities. No pressure, just a conversation, followed by some tightly timelined, sometimes even pushy negotiation tactics. An unsolicited M&A offer of this kind is nothing unusual for founders running successful companies.
Market context: why unsolicited offers are on the rise
Understanding why unsolicited approaches are increasing helps founders interpret them more clearly. EY’s transaction analysis describes a measured but active deal environment moving into the second half of 2026, with activity concentrated around high-conviction opportunities and 60% of global dealmakers expecting M&A and financing activity to increase over the next six months. In addition, over the last twelve months, PE firms have announced more than $900 billion in deals, a 34% increase, according to EY.
According to PwC’s 2026 M&A outlook, private equity funds globally held nearly 33,000 portfolio companies as of March 2026, 34% of which had been held for more than five years, creating pressure to both exit mature holdings and deploy fresh capital into new platforms. So, for attractive targets, this means there are always potential acquirers that do systematic outreach to businesses that have not decided to sell, have no advisers engaged and have no prepared materials.
Well-capitalised buyers are increasingly building out their business development functions, using data analytics to identify targets, and approaching founders earlier in their decision-making journey. The unsolicited approach is getting more and more industrialised.
For successful founders, this means an email like the one described may arrive whether they are thinking about selling or not. If a founder decides to engage, it should always be in a way that preserves rather than destroys value.
Why unsolicited offers almost always favour the buyer
Most buyers genuinely believe in the strategic logic of their offer, and that sincerity is not the issue. The structural problem is that unsolicited approaches eliminate competitive tension, which determines price more than anything else.
When a seller receives an offer without having run a process, they lack three things that determine negotiating power:
No prepared materials
There is no information memorandum showing the business in its best light, no management presentation, and no clean data room. The buyer arrives having spent months analysing the target and the seller is starting from scratch.
No price anchor
Without an independent valuation, fairness opinion, and view of comparable transactions, sellers can easily fall into anchoring bias. The buyer names a number first, and that number sets the entire negotiation.
No competing bidders
This is the most damaging bit. In their foundational National Bureau of Economic Research paper, economists Jeremy Bulow and Paul Klemperer showed that, under standard assumptions, a public auction beats even an optimally structured negotiation, provided the auction attracts at least one extra bidder. Their conclusion was stark: “the value of negotiating skill is small relative to the value of additional competition.”
The empirical research on actual M&A transactions confirms this precisely. A study of pre-public M&A negotiations, measuring competition through the ratio of formal proposals to confidentiality agreements signed, found that a one-standard-deviation increase in bidding competition corresponds to an approximate 6% increase in the deal initiation premium. Translation: more bidders means measurably higher opening prices, and unsolicited approaches are designed precisely to prevent additional bidders from entering. That study covers public US targets, but the mechanism applies with more force to private companies, which attract fewer competing bids to begin with.
The impact compounds over the deal timeline. KPMG’s 2025 M&A Deal Market Study found that 44% of deal professionals cite “agreeing on valuation” as the top obstacle to closing transactions. Valuation disputes are hardest to resolve precisely where no competitive process exists to establish what the market will actually pay. They are compounded by the fact that professional buyers spend their careers mastering price negotiation, while most business owners sell once in their lifetime. The experience gap is profound, and it shows most clearly when there is no competitive process to discipline the price discovery.
The structural difference between unsolicited and competitive processes
| Dynamic | Unsolicited offer | Structured competitive process |
| Pricing leverage | Buyer establishes the initial price anchor. | Market competition organically drives the price up. |
| Information symmetry | Buyer often has months of preparation; seller may be reactive. | Seller provides a curated, verified data room. |
| Alternative options | Seller can accept or walk away. | Multiple bids provide competition against one another. |
The psychology trap: flattery, exclusivity, and fake urgency
Beyond structural disadvantages, unsolicited offers are carefully designed psychological events.
For example, flattery can be deliberate. Some messages could emphasise how the buyer has “been following the company’s journey” and “admires what the team has built.” This taps into a founder’s hunger for external validation. After years of grinding through cashflow challenges and the loneliness of leadership, hearing that a sophisticated institutional investor thinks they have built something of real value often feels highly rewarding.
The exclusivity framing compounds the effect. Phrases like “we’d like to explore this exclusively” signal that the founder is unique. Reality is often different. A PE firm with a buy-and-build thesis might be approaching five or ten comparable businesses simultaneously, planning to transact with whichever founder bites first or where they can get the best deal.
Next step is often urgency. “Our investment committee has a window in Q2.” “We need to know by month-end whether you’d like to progress this.” These time constraints compress the seller’s decision-making timeline before they can assemble advisers or think clearly.
The most consequential milestone is signing an exclusivity agreement. Once a seller agrees to negotiate exclusively with one buyer, they give up their primary source of leverage: the ability to walk away or introduce competing bids.
What to do when such an email arrives
The right response is usually neither immediate rejection nor enthusiastic acceptance, but methodical preparation.
- Acknowledgement, but no engagement: A polite acknowledgement that one has received the approach is usually enough. Immediately providing financial information, agreeing to meetings, or naming a price before speaking to advisors is not a good way to build a negationing strategy.
- Getting an advisory team on board: Engaging specialist M&A advisers with relevant sector experience, legal counsel familiar with transaction structures, and a tax specialist is a suitable way of handling this, especially if more and more emails or LinkedIn messages keep coming in.
- Working out if the business is ready: Is now genuinely the right time to sell? What are the founder’s personal objectives? What would the business look like with another 12-24 months of growth investment?
- Mapping the full buyer universe: A sophisticated M&A adviser would run a systematic buyer analysis: strategic acquirers, competing PE firms, international buyers, and listed companies.
- Picking a process type: Options range from a broad competitive auction to a targeted process to a structured bilateral negotiation with competitive tension as a backstop.
- Re-engaging the original correspondent from a position of strength: Once a founder has advisers engaged, an independent valuation view, and a sense of alternatives, they can respond constructively and engage prepared and with leverage.
The M&A adviser will give an independent view of value, help the founder map the full buyer universe and manage the process. Research on adviser impact supports this: a study of 4,468 acquisitions of private sellers, using five separate methods to control for selection effects, finds that M&A advisers materially improve realised valuations for private sellers, with a further uplift where the adviser is top-tier.
When an unsolicited offer can be the right path
The approach above works for most situations, but not all. There are cases where responding to an unsolicited M&A offer by negotiating with that single bidder makes rational sense:
Distressed situations
If the company is cashflow stressed, facing covenant breaches, or operating in a sector in structural decline, the time and cost of running a competitive process might not be available. Speed and certainty have material value when the alternative is insolvency.
Founder’s desire for speed and absolute discretion
In some sectors, running a competitive auction sends a public signal that a company is for sale. This can unsettle employees, alarm key clients, and excite competitors. Where confidentiality is critical, a carefully managed bilateral process might be justified. For guidance on preparing for an exit, a structured timeline can help balance discretion with value capture.
Industries with high information leakage risk
This is a distinct risk from the signalling problem above. Where the natural buyers are direct competitors, an open process requires disclosing commercially sensitive information to firms that will still be competing with the business if they lose. Proprietary information disclosed during due diligence can be used against the eventual winner in post-merger competition.
Strategic fit with a specific acquirer
Occasionally, a particular buyer is genuinely the best owner of a business by a wide margin. They have the operating capabilities, market position, and cultural fit that no other buyer can match.
The common thread in all these exceptions is that even when the decision is taken to negotiate bilaterally, the seller still benefits from getting independent professional advice and a third-party valuation. This ensures they can articulate and defend why the price and terms are fair.
The central message: an unsolicited offer is the start of a process, not a replacement for one
In almost every case, the right first response to an unsolicited offer is neither rejection nor acceptance, but preparation. That means buying time, assembling a team, understanding the business’s value and mapping out alternatives, and only then re-engaging with the correspondent, ideally with credible evidence of competitive interest or at minimum with professional representation. Even where a bilateral deal turns out to be the right answer, that conclusion should be reached after the preparation, not instead of it.
If someone approaches you out of the blue with an offer, your first call shouldn’t be to the buyer. It should be to an M&A adviser who can tell you what your business is actually worth and who else might want to buy it.
At Acquinox Advisors, our team combines deep technology sector insight with robust transaction strategy to help founders navigate M&A with confidence. Whether you are currently exploring an unsolicited approach or preparing for a structured exit, we provide the expert advisory guidance needed to protect your interests and your company’s true value. Contact us today to discuss your strategic options.
