LOI (Letter of Intent)
A non-binding document outlining the key terms of a proposed transaction, submitted by a potential buyer before entering exclusivity.
Also known as: Letter of Intent, Indicative offer, IOI (Indication of Interest)
One-line definition
An LOI sets out the headline terms — price, structure, conditions, exclusivity period — without yet binding either party.
What it typically includes
- Indicative price or range (EV and/or equity value).
- Key assumptions (EBITDA base, net debt, NWC).
- Proposed deal structure (shares vs assets).
- Requested exclusivity period.
- Financing confirmation (equity/debt committed or not).
TS trigger
The LOI phase often triggers the appointment of TS advisers — FDD begins once the LOI is signed and exclusivity granted.
Related terms
Exclusivity
A period during which the seller agrees not to negotiate with other potential buyers, giving the preferred bidder time to complete due diligence and finalise documentation.
NDA (Non-Disclosure Agreement)
A confidentiality agreement signed by potential buyers before receiving sensitive information about a target company in a sale process.
CIM (Confidential Information Memorandum)
A detailed sell-side document providing comprehensive information about the target company to potential buyers who have signed an NDA.
Process Letter
A document issued by the seller's M&A adviser describing the sale process rules, bid deadlines, and required format for offers.