Entry in progress—B.P.
Wikipedia: White knight (business)
In business, a white knight, or “friendly investor” may be a corporation, or a person that intends to help another firm. There are many types of white knights. Alternatively, a grey knight is an acquiring company that enters a bid for a hostile takeover in addition to the target firm and first bidder, perceived as more favorable than the black knight (unfriendly bidder), but less favorable than the white knight (friendly bidder).
The first type, the white knight, refers to the friendly acquirer of a target firm in a hostile takeover attempt by another firm. The intention of the acquisition is to circumvent the takeover of the object of interest by a third, unfriendly entity, which is perceived to be less favorable. The knight might defeat the undesirable entity by offering a higher and more enticing bid, or strike a favorable deal with the management of the object of acquisition.
The second type refers to the acquirer of a struggling firm that may not necessarily be under threat by a hostile firm. The financial standing of the struggling firm could prevent any other entity being interested in an acquisition. The firm may already have huge debts to pay to its creditors, or worse, may already be bankrupt. In such a case, the knight, under huge risk, acquires the firm that is in crisis. After acquisition, the knight then rebuilds the firm, or integrates it into itself.
What Does Black Knight Mean?
A company that makes a hostile takeover offer on a target company.
The Free Dictionary
A company that is offering or executing a hostile takeover. If a firm makes an offer to shareholders to acquire a publicly-traded company after the board of directors refuses, or if it bypasses the board completely, one refers to the acquiring firm as a black knight. This is a derogatory term, and so one might expect the board, management, or even employees to use it more than shareholders.
Takeovers & Freezeouts
By Martin Lipton and Erica H. Steinberger
New York, NY: Law Journal Seminars Press
1978 (date of original publication; there have been several updated and Google Books has a 2003 edition—ed.)
If, despite the incantations of the Clergy and the sorties of the mercenaries, the Castle is about to be invested and the serfs are about to rebel, in rides the White Knight. He is a neighboring Count or foreign potentate of greater resources that the Black Knight. He too has mercenaries in his train. He vanquishes the Black Knight, repacifies the serfs and rebuilds the Castle. But alas, it is the White Knight’s men who now sit at the Council table. The Count either swears fealty to his new overlord or joins his fellow exiles in Palm Beach or La Jolla.
So goeth the takeover wars.
Google News Archive
10 February 1984, Lakeland (FL) Ledger, “The taking of America” by Art Buchwald, pg. 6C, col. 1:
“It sounds expensive.”
“You better believe it. Now if you can’t find a White Knight, you look for a ‘Gray Knight.’ A Gray Knight is someone the Target isn’t in love with, but could sleep with if she had no other choice.”
“What about the Black Knight?”
“The Black Knight is a third party that comes into the bedroom uninvited at the last moment to spoil the wedding night by tendering a higher offer.”
Google News Archive
6 January 1986, Lakeland (FL) Ledger, “Mergerspeak update,” pg. 3B, col. 1:
A white knight, you’ll remember from your class in Mergerspeak 101, is a company that, at management’s request, acquires a corporation to prevent an unfriendly takeover by a third party. now the knight has a cousin; the white squire—an investor who buys a big block of stock in a company, leaving so few shares outstanding that it would be difficult for an unwanted suitor to gain a controlling interest. What if this investor should make an untoward advance of his own? Meet the black knight.
New York (NY) Times
For Saudi Investor, Many U.S. Stakes
By WILLIAM G. SHEPHERD Jr., Special to the New York Times
Published: July 14, 1987
LONDON, July 13 — When shares of the Transamerica Corporation shot up last month, rumors ricocheted around Wall Street that the Primerica Corporation or the Ford Motor Company might be preparing a takeover bid.
Not a Knight, ‘White’ or ‘Black’
In the landmark town house that is his London branch office, Mr. Olayan, who lives in Riyadh, denied that he was putting Transamerica in play -that is, opening the bidding in a takeover contest - or that he was acting as a ‘’white knight’’ to scare off potential raiders. Instead, Mr. Olayan, who offered a rare interview, made it clear that he is a friendly investor with no takeover in mind.
‘’We have never taken a hostile position in a company,’’ Mr. Olayan said. A short, broad man in a rumpled suit, he puffed repeatedly on Carlton cigarettes and squinted as if in the desert sun. ‘’We are not a black knight.’’
New York City • Banking/Finance/Insurance • (0) Comments • Sunday, February 13, 2011 • Permalink