Originally Posted by
Nick Art
Is it normal that the winning bidders get reimbursed for their incurred bidding costs immediately?
Especially since they will have to finance SAS anyway once successful? This seems incredibly weird to me. Especially if the deal is not to go through I don't understand why SAS would cover these costs?
It’s very much within the range of normal from what I’ve seen over the years, but such clauses tend to also be a product of what is negotiated and agreed upon to get a deal signed.
In some regards it may as well be seen as the acquirer using the acquired’s own assets to finance the acquirer’s acquisition costs.
What hasn’t gotten much discussion is whether SAS either had or should have demanded an increase in valuation when selling to the likes of CastleLake or Apollo because of the portfolio balancing needs of some of the big investors in those funds. I wouldn’t be surprised if SAS didn’t strike a hard bargain.