Heads of terms—private M&A—share purchase

Published by a ��˾��ҹ�� Corporate expert

Precedents

Heads of terms—private M&A—share purchase

Published by a ��˾��ҹ�� Corporate expert

Precedents

Strictly private and confidential

To: [Insert potential seller name]

[Insert potential seller address]

FAO: [insert name of relevant contact at the seller]

Date: [insert date]

Subject to contract

Dear [insert name of relevant contact at the seller],

Proposed acquisition of the entire Issued share capital of [Insert target company name] Limited (the Company) from [Insert potential seller name] (the Seller)

1. 1
  Introduction
  1. 1.1
    Further to our recent discussions, this letter sets out the principal terms and conditions upon and subject to which we, [Insert buyer name] or a member of our group of companies (the Buyer), propose to acquire the entire issued share capital of the Company (the Sale Shares) from the Seller (the Proposed Acquisition). Each of the Seller and the Buyer is a Party and together they are the Parties.
  1. 1.2
    The terms in this letter are not exhaustive and[, with the exception of paragraphs [7.3,]8, 9, 10 and 11,] are subject to contract and not intended to be legally binding on the Parties. Neither Party shall be legally bound to proceed with the Proposed Acquisition unless and until a formal written Share purchase agreement is entered into.

Jurisdiction(s):

United Kingdom

Key definition:

Heads of terms definition

What does Heads of terms mean?

Heads of terms are preliminary agreements that precede substantive contract negotiations. They are also be referred to as: heads of agreement, memorandum of understanding; letters of intent; pre-contract protocol or term sheet. Heads of terms provide an outline of the commercial deal agreed between the proposed parties to a contract rather than detailing the finer points.

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