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.
BREAKING DOWN '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.