What is a 'Gray Knight'

A gray knight is a second unsolicited bidder in a public merger or acquisition, which takes advantage of any problems that might arise between the target company and the first bidder. It may outbid the first bidder, or offer a better alternative to a black knight attempting a hostile takeover.


Gray knights are like circling vultures, waiting for merger deals to get into problems or fail before they cross the finish line — creating a situation that puts the gray knight in a good negotiating position. They might outbid a white knight, or make a less-favorable offer, taking advantage of the fact that the target company sees them as a friendlier alternative to a hostile black knight. But a gray knight may not always reveal its true intentions.

  1. Lady Macbeth Strategy

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  3. White Squire

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  4. Gray Charges

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  5. Self-Tender Defense

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  6. Hostile Takeover

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