How do I run a silent auction?

How do you effectively run an M&A auction without pissing off any of the buyers?

• Answer:

  I get credits for answering this! My short answer is:  (1) if you have decided to sell yourself and you are not in talks with anyone yet, an M&A auction is totally typical and (2) if you've been approached by a single potential buyer but you want to shop for other offers, buyers often understand that too but you can piss them off if you break your actual or implicit promises to them. I agree with Jonathan that sophisticated buyers are accustomed to auctions and don't take it personally if you run a process.  Particularly if the seller approaches a buyer, most buyers understand the seller is probably approaching multiple potential buyers. In my mind the limited situations where buyers get irritated are breaches of exclusivity or when a seller pushes hard to get a valuation or a valuation range ostensibly as a commit to entering into an exclusive process and then all of a sudden that range is being whispered in back channel calls to other potential buyers.  Nobody likes being treated like a stalking horse. Finally, this isn't to say that some buyers won't choose not to bid if they are going into an auction, because the minute something becomes an auction, the risk of spending time doing diligence and valuation with nothing to show for it rises and a buyer may choose they have better things to do.This answer is not a substitute for professional legal advice....