Unsolicited Bid

AAA

DEFINITION of 'Unsolicited Bid'

An offer made by an individual, company or group of investors to purchase a company that was not actively seeking a buyer. The bid is a result of the unsolicited bid submitter's initiative and not due to any request made by the bid-upon company. Unsolicited bids may also sometimes be referred to as hostile bids if the company being bid for doesn't want to be acquired.

INVESTOPEDIA EXPLAINS 'Unsolicited Bid'

An unsolicited bid to purchase a company that was not intending to sell may be followed by other unsolicited bids as the news travels. These other bids may up the purchase price and start a bidding war or takeover fight. Unsolicited bidding can occur when a company wants to purchase another company in order to control its market share, profit from its expected growth, have access to proprietary technology or limit competitors from taking advantage of these situations.

RELATED TERMS
  1. Acquisition

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

    A white knight is an individual or company that acquires a corporation ...
  3. Friendly Takeover

    A situation in which a target company's management and board ...
  4. Hostile Takeover

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

    The difference between the estimated real value of a company ...
  6. Separation Of Powers

    An organizational structure in which responsibilities, authorities, ...
RELATED FAQS
  1. What happens to the stock prices of two companies involved in an acquisition?

    When a firm acquires another entity, there usually is a predictable short-term effect on the stock price of both companies. ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.
  2. Bonds & Fixed Income

    Cashing In On Corporate Restructuring

    Companies use M&As and spinoffs to boost profits - learn how you can do the same.
  3. Investing Basics

    The Merger - What To Do When Companies Converge

    Learn how to invest in companies before, during and after they join together.
  4. Forex Education

    Mergers & Acquisitions: An Avenue For Profitable Trades

    When major corporate transactions have a big impact on the currency markets, you can benefit.
  5. Options & Futures

    Pinpoint Takeovers First

    Use these seven steps to discover a takeover before the rest of the market catches on.
  6. Options & Futures

    The Basics Of Mergers And Acquisitions

    Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work.
  7. Economics

    What is Value Added?

    Value added is used to describe instances where a firm takes a product and adds a feature that gives customers a greater sense of value.
  8. Economics

    What is a Wholly Owned Subsidiary?

    A company whose common stock is 100% owned by another company, called the parent company.
  9. Economics

    What is the Breakeven Point?

    In general, when gains or revenue earned equals the money spent to earn the gains or revenue, you’ve hit the breakeven point.
  10. Investing

    What Tech Companies Seeking Funding Must Overcome

    Tech companies face a unique set of challenges, including a need for timely responses to changes in technology and difficulty recruiting the right talent.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center