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.

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  3. How can a company resist a hostile takeover?

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  4. How does a letter of intent work in the context of mergers and acquisitions?

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  5. What happens to the shares of a company that has been the object of a hostile takeover?

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