When a buyer uses exclusivity to lower the price
A late price cut is most concerning when the reason was knowable before the LOI.
Some buyers submit an attractive indication to win exclusivity, then seek a lower price after competing bidders have been dismissed. That is a bad-faith retrade.
The defining feature is not simply that the proposal changed. It is that the buyer lacks new, material information proportionate to the requested adjustment. The stated concern may have been visible in the original materials, may rely on a different valuation preference rather than a new fact, or may be presented late despite having been known for weeks.
Watch for shifting explanations. A buyer may first cite earnings quality, then financing, then market conditions when the earlier reason does not support the reduction. Other signs include an adjustment far larger than the quantified issue, pressure to accept immediately, or refusal to show the analysis behind the demand.
The seller’s strongest defense is a credible alternative. Before granting exclusivity, cultivate qualified backup parties and negotiate a limited exclusivity period; during exclusivity, preserve or resume contact only to the extent the letter of intent (LOI) permits, and remain prepared to end the process if necessary.
When a retrade arrives, slow the discussion down. Ask for the new fact, the evidence, the calculation, and the proposed contractual treatment. Consider whether the issue belongs in price, working capital, indemnification, or another term. Then compare the revised deal with the seller’s practical alternatives.