Stalking horse bid

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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Even the mainstream loves a horse-racing metaphor - how many dark horses have entered elections, how often do big plans fall at the first hurdle, and how about all those "stalking-horse bids"?