DEFINITION of 'Gray Knight'

A second, unsolicited bidder in a corporate takeover. A gray knight enters the scene in order to take advantage of any problems between the first bidder and the target company.

BREAKING DOWN 'Gray Knight'

Think of a gray knight as a circling vulture waiting to pick clean the leftovers.

In some parts of the world gray is spelled "grey."

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RELATED FAQS
  1. How do I identify a gray market?

    The term "gray market" refers to the market for the purchase and sale of uncirculated securities that will be offered at ... Read Answer >>
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    Read credit card statements carefully to avoid gray charges. Find the fine print before making online purchases, and remember ... Read Answer >>
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    The dotcom boom accelerated many deceitful business practices that first became apparent during the '80s and '90s. Many of ... Read Answer >>
  4. Are 'gray' credit card charges legal?

    Read the fine print and all credit card statements carefully to avoid misleading charges that often go unnoticed on credit ... Read Answer >>
  5. How can a company resist a hostile takeover?

    Learn about some of the defense strategies a public company's board of directors might employ to prevent a hostile bidder ... Read Answer >>
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    Learn about why a business might use a stock buyback to thwart a hostile takeover attempt by reducing its total assets and ... Read Answer >>
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