A stalking-horse bid is an initial bid on a company or other asset, made by an investor who intends to acquire the target. The stalking-horse bid is typically lower than the investor's eventual offer, and is used to gauge the interest of other potential buyers. If there is sufficient interest, the investor may raise their offer to a level that is acceptable to the target company.
What is a stalking horse synonym? A stalking horse is a company or individual that is used by another company or individual to bid on an asset, typically in order to drive up the price. The stalking horse is typically unaware of the true intentions of the company or individual that is using it.
What is a credit bid? A credit bid refers to a situation in which a bidder for a company offers to use the target company's debt as part of the purchase price. In other words, the bidder would assume the target company's debt as part of the deal. This can be attractive to the seller, as it can help to reduce the amount of cash that the seller would need to bring to the table. How do you use stalking horse in a sentence? A stalking horse is a company that is used by another company to bid on an acquisition target. The stalking horse company is usually set up by the acquirer and is used to create competition in the bidding process.
What is a DIP lender? A DIP lender is a lender that provides funding to a company during bankruptcy proceedings. This type of financing is typically used to help the company continue to operate while it restructures its debts. DIP lenders are typically paid back before other creditors, so they are considered to be a higher risk.
Who owns the stalking horse?
A stalking horse is a company or investment firm that makes an initial bid to buy a target company or asset before other potential buyers have a chance to submit their own bids. The stalking horse's bid sets the floor for the auction.
The stalking horse is typically chosen by the target company or its investment bankers. The stalking horse is usually a well-funded and reputable company that is interested in buying the target company or asset. The stalking horse bid is typically non-binding, meaning that the stalking horse can back out of the deal if another bidder offers a higher price.
The stalking horse bid typically includes a break-up fee, which is paid to the stalking horse if the deal is ultimately won by another bidder. The break-up fee compensates the stalking horse for the time and expense of due diligence and negotiating the deal.
The stalking horse bid is typically announced to the public, which triggers a formal auction process. Other potential buyers have a set period of time to submit their own bids. The target company then chooses the highest bidder.
The stalking horse bid is a common tactic in mergers and acquisitions (M&A). The use of a stalking horse can help to increase the price of the target company or asset and help to ensure that the deal is completed.