MAINTAINING CONFIDENTIALITY DURING A COMPETITIVE SALE PROCESS

MODERATORParis Aden, Partner & Co-Founder, Valitas Capital Partners

PANELHarry Blum, Managing Partner, Collins Barrow Toronto LLP

Curtis Cusinato, Partner, Stikeman Elliott LLPTim Morton, Managing Partner and Founder, Prompta Consulting Group

• Leaks can undermine the confidence of stakeholderso Employees

o Customers

o Suppliers

• Competitors could suggest a sale process signals weakness

• Some bidders could use information they get through the process against you

1. WHY IS CONFIDENTIALITY IMPORTANT?

• Need to Know principle

• Who is in the Inner Circle at the outset?

• How does it change as the sale process progresses?

• “Bake-off” hazards

2. YOUR INNER CIRCLE

• The window of vulnerability

• How to minimize it

• The unique risks of a failed sale negotiation

3. TIME IS YOUR ENEMY

• “No-names” canvass• Teaser• Information Memorandum• Management Presentations• Plant Tours• Virtual Data Room• Customer, supplier, key employee interviews

4. ESCALATION OF DISCLOSURE: TABLE STAKES

• How do the best in the business protect confidentiality?

• Confidentiality agreements – considerations

• Common blunders

• Code names

• Secure email

• Watermarking

• VDR’s

• Offsite meeting locations: the “Family Reunion”

5. PROTOCOLS AND SAFEGUARDS

• If you sell, everyone will know eventually

• Messaging that sets a positive tone for stakeholders going forward is key

• In the rare event of a leak, you may have to disseminate a standby statement – determining messaging in advance is critical

• Dissemination plans at announcement – Press release, message to employees, “Town Hall” meetings, communications with suppliers and customers

• Should your process be announced at the outset?

6. MESSAGING AND STANDBY STATEMENTS