A stalking horse bids , agreements , or bids is a bankrupt debtors attempt to test the market for debtor assets before auction from them. The goal is to maximize the value of its assets or avoid low bids, as part of (or before) a court auction.
Video Stalking horse offer
Prosedur
When entering a stalker horse offering, the debtor may offer bidding protection such as a parting fee to his or her best bidder before the auction. These incentives increase the offer value for bidders that may lead to better price bidding before the auction begins. This higher offer is now the initial bid for the auction and can generate benefits for the debtor and its real estate.
Maps Stalking horse offer
Example
On October 22, 2007, SCO technology company requested a bankruptcy court to approve an agreement under which the buyer would acquire "substantially all assets used by the Company in connection with SCO UNIX Business and related claims in litigation." The agreement includes the provisions of "stalking horses": If the buyer, York Capital Management, will be designated as the stalker in the next offer for SCO assets, and if others beat York's offer, SCO shall pay York a $ 780,000 cancellation fee and reimbursement of all costs issued by York up to $ 300,000. In this way, York will get the cost and $ 780,000 by acting as a stalker and preventing other bidders from making low bids.
On August 4, 2008, Steve and Barry's LLC, a casual clothing retailer, filed a horseshoe agreement with the US Bankruptcy Court for the Southern District of New York. Their partners in this asset purchase agreement are BH S & amp; B Holding LLC, a subsidiary of Bay Harbor Management.
On July 27, 2009, The Wall Street Journal reported that Telefon AB L.M. Ericsson has won a stallion horse bid to acquire CDMA division Nortel Networks Corp., for $ 1.13 billion.
On July 8, 2010, the Texas Rangers Major League Baseball team announced the potential of stalking horses. "Auction with stalker, or minimum, bid is more often used than the so-called" naked "auction without the lowest price," William K. Snyder, a court-appointed restructuring official, said. "In addition, stalking a horse bidder usually receives a reasonable" parting "fee if it does not succeed in the auction," Snyder said. Under the canceled plan, a $ 304 million cash share from the June 24 Greenberg-Ryan Group deal with Tom Hicks owner will serve as a minimum bid, with the next bid at least $ 20 million higher. Greenberg-Ryan will receive $ 15 million if lost. "
On February 21, 2011, Reuters reported Blockbuster's intention to pursue a $ 290 million horse offering with Cobalt Video Holdco.
On April 4, 2011, TechCrunch reported Google's intention to pursue $ 900 million stalking horse bids for Nortel patents.
In 2013, Hostess Brands used a stalking horse auction to sell its assets in bankruptcy.
On October 17, 2013, Designline, now known as Environmental Performance Vehicle, Charlotte bus manufacturer, NC, uses this technique but does not accept offers.
On April 15, 2013, Eastman Kodak proposed a $ 210 million horse stalking deal in which Brother Industries will acquire the Kodak Document Imaging Division ahead of Kodak court's bankruptcy approval scheduled for June 2013.
On June 10, 2016, Ziff Davis proposed a stalking-horse bid under US $ 90 million after Gawker Media announced to file for Chapter 11 bankruptcy protection.
Further reading
Owens, Henry (2005). Distressed Investment Banking . City: Beard Books. ISBN: 1-58798-267-6.
References
Source of the article : Wikipedia
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