Business, Legal & Accounting Glossary
Bid Instructions, also known as Bidder Instructions, are documents issued by the investment bank running a competitive auction process that contain all of the requirements, expectations, procedures, and other information deemed necessary to assist bidders in presenting their bids.
Bid instructions for a mid-market transaction are typically summarised at the end of the confidential information memorandum and include, but are not limited to:
Clarification of the investment parameters desired and expected by the sellers in the transaction.
A synopsis of information will be included in a letter of intent. This could include: an estimate of value and the major assumption(s), if any, made in determining the purchase price; the percentage of equity that the potential purchaser will acquire; any material and/or unusual representations and warranties required; any major conditions to be met prior to closing; and a comprehensive list of the additional information or requirements that the potential purchaser would require to complete its investigation.
The timetable and the steps that the bidder must take during the auction process. This will include: the selection of prospective purchasers who will proceed to detailed due diligence following the initial bidding process; procedures for due diligence and documentation review; management presentation meetings and discussions with senior management; and the procedure for completing formal purchase, sale, and closing agreements.
Competitive Bid Process
Stalking Horse Bidder
Two-step Private Auction
One-step Private Auction
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This glossary post was last updated: 26th January, 2022 | 0 Views.