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.
A white squire is similar to a white knight, except that it only exercises a significant minority stake, as opposed to a majority stake. A white squire doesn’t have the intention, but rather serves as a figurehead in defense of a hostile takeover. The white squire may often also get special voting rights for their equity stake.
Wiktionary: white knight
white knight (plural white knights)
1.(business) An individual or corporation that intends to acquire another company in order to avert a hostile takeover.
What Does White Knight Mean?
A company that makes a friendly takeover offer to a target company that is being faced with a hostile takeover from a separate party.
(Oxford English Dictionary)
white knight n. (a) (with allusion to a character in Through the Looking-Glass), an enthusiastic but ineffectual person; (b) a hero or champion; spec. (Stock Exchange slang) a company that comes to the aid of one facing an unwelcome take-over bid.
1895 M. Kingsley Diary 23 May in Trav. W. Afr. (1897) vi. 110 The chief‥bows with a jerk that causes the pantaloons to faint in coils, like the *White Knight in ‘Alice in Wonderland’.
1956 N. Marsh Off with his Head (1957) ii. 41 ‘I believe I have made a really significant discovery‥’ cried Dr. Otterly with the infatuated glee of a White Knight.
1970 Times 23 Apr. 7 The Italian Communist Party‥will take its members into the regional election campaign next month as white knights dealing with the joint evils of corruption and reaction.
1976 J. Philips Backlash (1977) iii. ii. 130 Woody would like nothing better than to play the white knight to my damsel in distress.
1979 N.Y. Times Mag. 30 Sept. 24/4 The Rangers’ problems stemmed from the habit that‥the team’s general manager‥had of hiring ineffectual cronies to coach the club, and then replacing them with himself when they failed—a kind of ‘white knight’ compulsion.
1981 Guardian 30 Oct. 15/1 Thomas Tilling‥emerged yesterday as the white knight appointed by Berec to save the Ever Ready battery maker from the clutches of Hanson Trust.
Google News Archive
25 October 1977, Spokane (WA) Spokesman-Review, ‘Takeovers spawn exotic glossary,” pg. 17, col. 3:
NEW YORK (AP)—A good dose of Shark Repellent and a White Knight or two can provide plenty of hassle for a Saturday Night Special in takeover territory these days.
With cash tender offers approaching record levels, the trend to merge has spawned its own exotic glossary, the Conference Board reports in a study released Monday.
Some terms defined by the nonprofit business research organization:
-- White Knight: A company that steps in to thwart a raider by acquiring a target company itself.
25 October 1977, New York (NY) Times, “So Sleeping Beauty Was Rescued By White Knight From Bear Hug” by Robert J. Cole, pg. 73:
In the melodramatic idiom of Wall Street, the United Technologies Corporation tried a few months ago to clamp a bear hug around the Babcock & Wilcox Company, but J. Ray McDermott & Company, after initial resistance, eventually came forward as the White Knight and walked off with Sleeping Beauty.
The White Knight—also called Prince Charming or Sweetheart—is the company that steps in and acquires the target itself.
White Knights and Black Eyes
By John S. DeMott;Frederick Ungeheuer;Barbara B. Dolan Monday, Feb. 14, 1983
* It was Lipton, apparently, who first popularized the term white knight. In his book Takeovers and Freeze-outs, co-authored with Erica H. Steinberger, he describes the process metaphorically. A count (read corporation) under attack from a marauding black knight tries to defend his castle. But when all else fails, he turns to a white knight, “a neighboring count or foreign potentate [who] vanquishes the black knight, repacifies the serfs and moves into the castle. But alas it is the white knight’s men who now sit at the council table. The count either swears fealty or joins his fellow exiles in Palm Beach or La Jolla.”
New York City • Banking/Finance/Insurance • (0) Comments • Thursday, February 10, 2011 • Permalink