Brad Feld

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Best and Final

Nov 01, 2004

Oracle announced their “best and final” offer for PeopleSoft today.

I’ve heard the phrase “best and final” a remarkable number of times recently in several deals I’ve been involved in.  Each time, it’s not the best and final as more negotiation occurs and the credibility of both parties is stretched as a deal doesn’t come together.  In my experience, good deals for both parties don’t have “best and final” conditions – the negotiation is a dance that works its way to a deal, often winding and twisting about, but converging if both parties want it to. 

When one party starts saying “best and final”, you usually know you have a problem.  In the case of Oracle, it’s an unwanted (by PeopleSoft management) bidder trying to press another constituency (the PeopleSoft shareholders) to make a decision.  In a public to private or private to private negotiation, it’s usually an attempt by one party to force a set of terms, rather than continue to try to collaboratively negotiate to an outcome that works for both parties. 

When “best and final” gets thrown out, I usually take it as a signal that the deal is going to die.  Of course, deals often die before coming back to life, in which case best and final was irrelevant.  If both parties are trying to get a deal done – behavior on either side that forces a set of terms is usually counterproductive as there are often multiple constituencies involved that have to solve an increasingly complex equation (ah – if price was the only deal term that mattered – life would be so much simpler.)

So – the next time you hear “best and final” – listen carefully to what it really means.