Why Is It Called A Stalking Horse Bid

Maret 07, 2021 Posting Komentar

The stalking horse is a potential investor that makes the initial offer on the companys assets working with the debtor and creditors committee to structure the timeline and procedures of sale. One of those aspects can be the so-called stalking horse bid This type of strategy is an initial bid from an interested company on a bankrupt companys assets.

The Operational Gc When Hunting For A Bargain Don T Forget Your Horse Acc Docket

In a stalking horse public auction of a financially troubled business an initial bid by the stalking horse bidder is divulged to the marketplace and becomes the minimum quote or floor cost that potential.

Why is it called a stalking horse bid. Why is it called a stalking horse bid. A stalking horse is somewhat of a misnomer as it hints the potential buyer is hidden from the public the courts and creditors. Why is it called a stalking horse bid.

The term is an old hunting term referring to either a real horse or an image of a horse typically some type of screen behind which a hunter would hide to conceal himself from and get closer to his prey. Taken from a hunting term in which fowl would not run away from hunters hidden behind their horses stalking horse agreements occur when a third-party buyer tests the market for a debtor. These companies or individuals place an initial offer in the hopes of driving up the value of a debtors assets in bankruptcy auctions.

A stalking horse bid is an initial proposal to buy an asset from a distressed company most often one that is bankrupt or in bankruptcy protection. These potentially higher bids are referred to as overbids. A stalking horse bid is an initial bid on a distressed companys assets made by an interested party that the bankrupt company debtor chooses to participate in a 363 saleThe stalking horse bidder agrees to purchase the specific assets unless the bankruptcy estate receives a higher better bid.

A stalking-horse bid is an initial bid on the assets of a bankrupt company. The due diligence alone can be very very expensive. Purchase a debtors assets is often known as a stalking horse The stalking horse is the initial bidder who enters into an agreement with the debtor to purchase the assets to be sold.

It is called that because it is a way to draw other bidders out of the bushes. The term stalking horse originated way back in the 16th century. What Does Stalking Horse Mean.

Why is the Stalking Horse Bidders Bid lower than the valuation prepared by the independent valuer as of August 2020. Why Be A Stalking Horse Bidder. How Does a Stalking Horse Bid Work.

The bidder is chosen from a pool of candidates and must perform their due diligence in placing their bid. The idea of a stalking horse bid is a lot more recent. Think of the appraisal the toxic report the structural engineering report and the legal fees involved with obtaining an estoppel.

This strategy called a stalking horse bid acts as a way to test the market. Popularly referred to as a stalking horse bid the offer by the private equity firms serves as the minimum proposal for the business and could still be topped by others. It loosely implies the possible buyers deal is hidden from the courts creditors and public although this is not always the case.

The Pros and Cons of a Stalking Horse Bid Question. In connection with the sale process over the last 2 months Moelis the financial adviser to the Chapter 11 Entities contacted more than 180 qualified parties to solicit their interest in submitting. A stalking horse bidder also is in position to negotiate favorable bidding procedures aimed at discouraging other bidders from participating.

This explains why the breakup fee cannot be. The initial bidder with whom the debtor negotiates a purchase agreement is called the stalking horse bidder. For example if the stalking horse bid is 1m plus a breakup fee of 30000 and cost recovery of 20000 other bidders will need to bid 1050000 for their bid to be of equal value to the stalking horse bid other terms and conditions being equal.

Usually the company or its receiver will select a buyer willing to make an offer. The bankruptcy trustee or judge will want bidders to offer the highest possible price but the buyer known in this context as the stalking horse buyer or stalking horse bidder will want to discourage bids higher than the negotiated price. A stalking horse bid is one way the debtor can at least establish a floor of the assets as a way to avoid low ball bids at an auction and establish at minimum a satisfactory return.

The term stalking horse comes from an old hunters term from when hunters would hide behind their horses as they crept as closer to their prey. A stalking horse bidder is an entity that a distressed company chooses to make the first bid when selling one or more of its assets in an auction type process. The agreement wil contain the initial purchase price the stalking horse bid as well as many conditions one of which is.

The term is an old hunting term referring to either a real horse or an image of a horse typically some type of screen behind which a hunter would hide to. The stalking horse sets the low-end bidding bar so that other bidders can not underbid the purchase price. The term stalking-horse originates from a hunter trying to conceal himself behind either a real or fake horse.

The term stalking horse originates from a hunter trying to conceal himself behind either a real or fake horse. Its very purpose is to encourage higher bids. In the distressed MA context a stalking horse refers to a possible buyer participating in a stalking horse auction to purchase the assets of an insolvent debtor as a going concern.

The initial bidder with whom the debtor negotiates a purchase agreement is called the stalking horse bidder. The company in bankruptcy usually chooses the investor who gets the stalking horse bid. Why would a company or person want to make a stalking horse bid.

The bidding procedures ultimately are subject to bankruptcy court approval but the stalking horse bidder may.

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