What Does Due Diligence Grind Mean?
Due diligence grind refers to a bidder’s reduction of its preliminary offer price on the basis that their due diligence on the target company reveals information that is less favourable than the bidder’s initial expectations.
While there are many instances where a bidder’s reduction of its preliminary offer price is warranted (the discovery of a previously undisclosed liability, for example), the due diligence grind typically refers to circumstances where a bidder floats an inflated initial price in order to access a target company’s confidential information with the intention of using its due diligence findings as a pretext to reduce its offer price.
