Stalking-Horse Bid


DEFINITION of 'Stalking-Horse Bid'

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.

BREAKING DOWN '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.

  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for ...
  3. Bankruptcy Risk

    The possibility that a company will be unable to meet its debt ...
  4. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  5. Asset

    1. A resource with economic value that an individual, corporation ...
  6. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
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