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Black Knight

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Definition of 'Black Knight'

A company that makes a hostile takeover offer for a target company. In mergers and acquisitions, a black knight attempts a takeover that the target company deems unwelcomed. When a company is facing a hostile takeover by a black knight, a white knight may appear to offer a way to avoid the hostile takeover with a friendly takeover.
Investopedia Says

Investopedia explains 'Black Knight'

Black knights attempt hostile takeovers of target firms. 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.

Related Definitions

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    Saturday Night Special

    An obsolete takeover strategy where one company attempted a takeover of another company by making a sudden public tender offer, usually over the weekend. This merger and acquisition ...
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  • Hostile Takeover

    The acquisition of one company (called the target company) by another (called the acquirer) that is accomplished not by coming to an agreement with the target company's management, but ...
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  • Lady Macbeth Strategy

    A corporate-takeover strategy with which a third party poses as a white knight to gain trust, but then turns around and joins with unfriendly bidders.
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    • Takeover

      A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
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    • White Knight

      A company that makes a friendly takeover offer to a target company that is being faced with a hostile takeover from a separate party.
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    • Yellow Knight

      A company that was once making a takeover attempt but ends up discussing a merger with the target company.
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    • Target Firm

      A company which is the subject of a merger or acquisition attempt. A takeover attempt can take on many different flavors, depending on the attitude of the target firm toward the ...
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    • Sleeping Beauty

      A company that is considered prime for takeover, but has not yet been approached by an acquiring company. A company may be considered a sleeping beauty for a variety of reasons, ...
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    • Shark Repellent

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      The most valuable unit(s) of a corporation, as defined by characteristics such as profitability, asset value and future prospects. The origins of this term are derived from the most ...
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