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.

BREAKING DOWN '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.

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RELATED FAQS
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    The low volumes typically traded through after-hours trading systems can create wide bid-ask spreads. Read Answer >>
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    A buy limit order is only executed when the asking price is at or below the limit price specified in the order. Read Answer >>
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