However, if these advisors are not experienced in negotiating a transaction with an independent ESOP trustee, then there may be a role for one more party a special advisor to the shareholders. The primary role of the special advisor is to negotiate the most favorable price, terms, and conditions for the selling shareholders. Just as the ESOP trustee heads up a team of advisors who assist him in making his decisions, the special advisor heads up the team representing the selling shareholders. A significant difference comes from the fact that the ESOP trustee makes the final decision for the ESOP, whereas the selling shareholders make the final decision for themselves, based on input from their advisors. All experienced independent ESOP trustees have negotiated with selling shareholders numerous times in the past, and will negotiate with selling shareholders as a normal part of the process.
Price immediately comes to mind.
For example, marketability discounts can vary by a factor of two or more. And, just because a stock has had a particular marketability discount applied to it in the past for ESOP purposes does not necessarily mean that same marketability discount is appropriate today. Is so, then shares will be allocated to the ESOP over a substantially longer period of time than is required to pay the bank debt. Alternatives Keep in mind that when shareholders are considering whether or not to sell stock to an ESOP, they frequently have other alternatives, especially in certain industries. Many times they would prefer to sell to the ESOP, and see the company perpetuated and the people who helped build the company over many years rewarded for their loyal efforts.