Part II: As CEO, Supporting your Equity Owner Once a Decision Has Been Made to Sell the Company
George P. Shenas, Esq. hosts Robert ("Bob") Brendel, former President and CEO of T-Systems, International, and Gary E. Gist, Chairman of the Board of Intersil Corporation
George and Bob discuss how establishing sound governance and reporting systems within a company is critical, because a buyer will require transparency and will undertake a very comprehensive review of facts and figures before committing to buy the company. As such, a CEO must be a convincing and knowledgeable advocate for the enterprise so as to support any effort on the part of the equity owners to close a sale. Gary adds that a CEO should be familiar enough with the ‘players’ in the company’s line of business, whether those players are possible financial buyers or strategic buyers, that the CEO can work closely with the investment banker or other advisors to identify the right counterparties. Bob suggests actually ranking the counterparties in terms of pros and cons (as a potential acquirer) in order to prioritize informal conversations that lead to formal negotiations. When asked by George how a CEO can help minimize a seller’s risk or liabilities, Gary replies that a CEO’s most important contribution to the process is to accurately relay operational results to any bidder, as well as to make only those projections which the CEO is capable of meeting each and every month.