Stalking-Horse Bid
What Does Stalking-Horse Bid Mean?
An initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt company chooses the stalking horse to make the first bid.
Investopedia explains Stalking-Horse Bid
This method allows the distressed company to avoid low bids on its assets. Once the stalking horse has made its bid, other potential buyers may submit competing bids for the bankrupt company's assets. In essence, the stalking horse sets the bar so that other bidders can't low-ball the purchase price.
Related Links
- Z Marks The End - Investors need to know how to detect signs of looming bankruptcy. The Z-score can help.
- The Dirt On Delisting - Listed securities are 'the cream of the crop'. Find out how a firm can lose that status and why you should be wary.
- What Are Corporate Actions? - Be a savvy investor - learn how corporate actions affect you as a shareholder.
- The Wacky World of M&As - Do you want your company to sandbag or greenmail? Welcome to the dramatic world of mergers and acquisitions.
