Black Knight

A black knight is a company that makes an unwelcome takeover offer for a target company. When a company is facing a hostile takeover bid, a white knight may make a friendly takeover offer that enables the target company to avoid the hostile takeover.

A hostile takeover may proceed via a tender offer, a proxy fight or by purchasing shares on the open market. A white knight can help the target firm by offering terms for a friendly takeover. A gray knight is a company that offers an unsolicited bid, while another company is negotiating a takeover with the target firm. A yellow knight is a company that initiated a hostile takeover but changes tactics during the process to negotiate on more agreeable terms.