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Stalking Horse Bid

   Also found in: Wikipedia 0.02 sec.
Stalking horse bid
In bankruptcy proceedings, this refers to first bid for the companies assets. This is the bid to beat. If there are multiple bids, often there is a bankruptcy auction.

Stalking Horse Bid
1. In a corporate bankruptcy in which the corporation wishes or is required to sell its assets, an initial bid on those assets by a third party chosen by the corporation. This is done to ensure that the bankrupt corporation does not have to settle for unacceptably low prices for its assets.

2. More generally, a "trial balloon" in which a third party approaches a person or company inquiring about the possibility of a (usually hostile) takeover. The party actually asking about the takeover remains anonymous so as to protect its reputational risk in case the idea does not meet with favor.


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RIM believes that such an offer would result in an extremely attractive price for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks.
In bankruptcy cases, a stalking horse bid sets a threshold price so that other potential bidders can't low-ball the purchase price.
We had a case where the Trustee had only two groups participating in a sale, our contacts increased the final price from the stalking horse bid of $10.
 
 
 
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