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Controlled Auction
A structured process where multiple potential buyers are invited to submit bids, often used to maximize the sale price of the target company.
Implications
A sales process where multiple potential buyers are invited to bid on a company or asset, but the process is managed by the seller to maintain control over the timing, confidentiality, and selection criteria.
Example
Example: A private equity firm uses a controlled auction to sell a portfolio company, inviting a select group of strategic buyers to submit bids while keeping the process confidential.
Related Terms
Different from open auctions, which are fully transparent and competitive, controlled auctions allow the seller to manage the process and select the most favorable offer.
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