Either you or your colleague Sam will be at the negotiations table in a week with representatives of your prospective target. Currently, you and Sam are ironing out the strategy and tactics to use. You would like to settle a couple of issues ahead of the negotiations. Actually, you would strongly prefer to tell the target straight away that your employer is willing to retain all target employees.

Your employer does want to retain them because this will make for a cheaper and smoother integration of this specific target. Sam disagrees though about the usefulness of telling the target now that this aspect is a done deal.

Sam believes it will be better for the acquirers position to keep quiet about this decision to retain all target employees. The decision can be announced as a possibility rather than a done deal at some convenient moment with the idea of influencing the target to make concessions regarding some other aspect. In Sams opinion, nothing will be lost if such an opportunity does not present itself during the negotiations as Sam is confident that this can also be discussed later.

Do you agree with Sam? Why or why not?

Please align your thinking toward EITHER these Merger & Acquisition topics: M&A Context and Implications, Due Diligence, SPACs, Synergies, Contingent Value Rights, Comparable, Negotiations.