October 23, 2014

Stupid or gutless?

“Are they stupid?” asked my client.

He had received a less-than-satisfactory offer from the company he was certain would buy his business. “I’d rather liquidate my company than sell it for that!”

After reminding him that he had already received far better offers from other companies, I said: “They are not stupid, but they are gutless.”

He clearly didn’t have a clue what I meant. I tried to explain further.

“Some business conversations are difficult, and people are afraid to say what they really mean. They don’t want to offend, or affect a working relationship. They lack the courage to tell how it is. I think that could be true here. That’s why I think they’re just being gutless.”

Seeing that my client was still miles away from the point I was trying to make, I continued to elaborate.

“Sometimes, an acquirer submits an offer he knows the other party will reject,” I said.

My client got the point: “Then they are not really interested in buying any shares in my company?”

“Exactly!” I answered. “But they thought it was better to make an offer, than to make no offer at all.”

If people said what they really mean, and what they really think, wouldn’t the world be a more comfortable place to live in?

The oldie of the week: The Manhattan – Kiss and Say Goodbye (1976)

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