Stalking Horse Bidder

A stalking horse bidder is an entity or individual that makes the first bid on a bankrupt company's assets, effectively setting a baseline price for an auction. This initial bid helps attract other potential buyers by demonstrating interest in the assets, as it establishes a minimum acceptable price. The stalking horse bidder often negotiates a deal with the bankrupt company, potentially receiving certain incentives, like a break-up fee, if they do not win the final auction. This process aims to maximize the value of the assets during bankruptcy proceedings while providing a structured sale process.