Buyers are famous for declaring early in the game that they won't participate in an auction. They'll tell you "frankly" that they won't respond to competitive bids. Most sellers, however, if they get a serious buyer, naturally wonder if a better deal is available in the larger market. They quite rightly want to put their company in play, albeit quietly.

In our view, unless the buyer has extraordinary leverage in the transaction, they ought to be limited to having it either one way or another. But not both. They can't simultaneously claim they won't participate in competitive bidding, but at the same time refuse to pay for the exclusive right to negotiate. Prior to serious negotiations with a buyer, if they insist on a "no shop" provision, ask them what they are prepared to pay for it. Let them know they can have it whichever way they want, but not both ways.