The deal could be confirmed and contracts signed and the only way DIC could get out of it is if the due diligence turns up anything that doesn't match with the agreements. i.e say we told them we had £80million of debts and they check the books and it's really £90million. Basically due diligence only happend when a deal is close. Another thing is we could get money if they pull out of the deal. This happens a lot in mergers as a show of good faith. Say Tesco want to take over Sainsbury's and they agree a deal in principle, they then get to look at sainsbury's books to check them out. Now if the merger falls through Tesco will have in depth knowledge of Sainsbury's financials etc. That is why they have to pay a penalty if the deal falls through.