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 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 TERMS
  1. Takeover

    A corporate action where an acquiring company makes a bid for ...
  2. White Knight

    A white knight is an individual or company that acquires a corporation ...
  3. Lady Macbeth Strategy

    A corporate-takeover strategy with which a third party poses ...
  4. Yellow Knight

    A company that was once making a takeover attempt but ends up ...
  5. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  6. Target Firm

    A company which is the subject of a merger or acquisition attempt. ...
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