A letter to initiate negotiations usually follows preliminary discussion about a possible transaction. Talks become more serious once the parties realize they have common interests, and at some point one of the parties sends a letter requesting a formal negotiation. Letters to initiate a negotiation are common in mergers and acquisitions, with the party most interested in making the transaction sending the letter. The letters are often sent by overnight delivery for speed and impact.
Type a letter that is brief and contains few details about a possible offer. Leave that for the actual negotiating session. Begin the letter with an acknowledgement of previous discussions, if applicable. Then request that the parties officially begin formal negotiations.
Request that both parties sign nondisclosure agreements and agree to share confidential information, such as audited financial statements, bank references and tax records. The nondisclosure agreement prohibits either side from discussing confidential information with outside parties.
Ask that appropriate officials sign the nondisclosure agreement and return it within three business days. Add that after receipt of the nondisclosure agreement you will follow up by phone to set a date for the first negotiating session.
Sign the letter with a proper business closing such as, "Sincerely yours," or "Regards." Skip a few lines and add your printed name. Sign the letter between the closing and your name. Place the word "Enclosure" one line below your printed name to note the nondisclosure agreement, which is included with your letter.
Properly address the envelope and send the letter by overnight courier or a similar method.