How to submit an offer for a company in administration
A distressed offer letter is 2–4 pages. It leads with price, backs it with funding evidence, acknowledges TUPE, and closes in 48–72 hours. Here's the exact structure UK administrators expect to see.
Split by asset class — goodwill, stock, plant, IP, debtors — so the administrator can defend it under SIP 13/16.
Bank letter, ABL indicative term sheet or solicitor undertaking. Attached, not promised.
Offer valid 48–72h. Exchange 3–5 working days from acceptance. IBS clause included.
Offer letter — canonical structure
- 1. Header: To the joint administrators, subject line: 'Offer to acquire the business and assets of [Company] (in administration)'. Include Newco entity name.
- 2. Executive summary: 3–4 sentences — total price, funding source, timing, TUPE acceptance.
- 3. Price breakdown table: Goodwill £X, stock £X (per data-room schedule), plant & machinery £X (per attached list), IP & domains £X, book debts £X.
- 4. Funding evidence: Attached — bank letter, ABL indicative term sheet, solicitor undertaking.
- 5. TUPE: 'We acknowledge TUPE 2006 applies and will comply with reg 13 from completion. Regulation 8 relief for pre-completion statutory liabilities is assumed.'
- 6. Conditions: Ideally none. Any conditions justified in 1–2 sentences.
- 7. Timing: Offer valid until [date + 72h]. Exchange within 3–5 working days of acceptance.
- 8. IBS clause: 'Purchase on an in-as-is basis with no warranties or representations from the administrator or the company.'
- 9. Signature: Newco director. Solicitor cc'd.
Related
Frequently asked questions
What is an IBS clause?
'In as-is basis' — a clause where the buyer acknowledges they are buying the assets as-is with no warranties or representations. Standard in all administrator sales because the administrator personally cannot give commercial warranties on a business they've only just taken over.
How is the price structured in the offer letter?
Break the total by asset class: goodwill (residual), stock (usually independently valued), plant & machinery (depreciated cost or auctioneer value), book debts (discount to face value), IP (nominal to significant depending on brand), and — separately — TUPE liabilities acknowledged as a buyer cost.
Do I need a deposit?
Sometimes. Larger deals (£500k+) often carry a 10% non-refundable deposit on 'exchange with delayed completion'. Pre-packs typically exchange and complete same day — no deposit needed because the whole thing is instant.
What's a typical offer-letter length?
2–4 pages. Any longer and administrators lose patience. The point is clarity: price, funding, timing, acknowledgements. The APA (20–40 pages) handles the detail.
How do I express the offer legally?
'Subject to contract' unless you are ready to be bound instantly. Once the administrator confirms preferred-bidder status, escalate to 'subject only to same-day APA execution' as a signal of commitment.
Should I include conditions precedent?
As few as possible. Administrators strongly prefer unconditional offers with cleared funds. If you must condition on financing, attach the lender's indicative offer to prove it is not a fishing expedition.
How do I acknowledge TUPE?
Include a specific clause: 'The buyer acknowledges that TUPE 2006 will apply to the transfer and that all employees on the attached schedule will transfer to Newco on completion. The buyer will comply with regulation 13 obligations from completion.'
What about book debts?
Two options: (a) buyer purchases the debtor book at a discount (typically 50–80% of face value), collects post-completion; (b) administrator retains and collects, buyer takes assignment of new trading debts only. Depends on the age and quality of the ledger.
How long is my offer open?
Typically 48–72 hours. Administrators need to shortlist, compare and get authority to complete. Offers open for weeks signal a buyer who doesn't understand the process.
Can I offer above the highest bid to guarantee winning?
Yes but framed as a 'ceiling with a floor' — 'we will match or beat any competing offer up to £X'. Administrators can accept this on the basis of getting the best price for creditors under SIP 13/16.