Examples
On October 22, 2007, technology company SCO asked a bankruptcy court to approve a deal whereby a purchaser would acquire "substantially all assets used by the Company in connection with its SCO UNIX Business and certain related claims in litigation." The agreement included a "stalking horse" provision: If the purchaser, York Capital Management, were to be designated as a stalking horse in subsequent bidding for SCO's assets, and if others outbid York, then SCO would have to pay York a $780,000 breakup fee and reimbursement of all expenses incurred by York up to $300,000. In this way, York would earn its expenses and $780,000 by acting as the stalking horse and preventing other bidders from making lowball offers.
On 4 August 2008, Steve and Barry's LLC, a retailer of casual apparel, filed a stalking horse agreement with the U.S. Bankruptcy Court for the Southern District of New York. Their partner in this asset purchase agreement was BH S&B Holding LLC, a subsidiary of Bay Harbor Management.
On 27 July 2009, The Wall Street Journal reported that Telefon AB L.M. Ericsson had won a stalking horse bid to acquire Nortel Networks Corp's CDMA division, for $1.13 billion.
On July 8, 2010, the Texas Rangers Major League Baseball team announced a potential stalking horse deal. "'An auction with a stalking horse, or minimum, bid is more frequently used than a so-called “naked” auction without a floor price,' William K. Snyder, the court-appointed restructuring officer, said. 'Moreover, the stalking horse bidder commonly receives a “reasonable” break-up fee if unsuccessful in the auction,' said Snyder. Under the scrapped plan, the $304 million in cash portion of the Greenberg-Ryan group’s May 24 deal with owner Tom Hicks would serve as a minimum bid, with the next bid at least $20 million higher. Greenberg-Ryan would have received $15 million if it lost."
On 21 February 2011, Reuters reported Blockbuster's intention to pursue a $290 million stalking horse offer with Cobalt Video Holdco.
On 4 April 2011, TechCrunch reported Google's intention to pursue a $900 million stalking horse bid for Nortel's patents.
In 2013, Hostess Brands used a stalking horse auction to sell off its assets in bankruptcy.
On April 15th, 2013 Eastman Kodak proposed a stalking horse deal of $210 million whereby Brother Industries would acquire Kodak's Document Imaging division ahead of Kodak's bankruptcy court approval slated for June 2013.
Read more about this topic: Stalking Horse Offer
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