The White Knight is the savior of a company facing a hostile takeover. Company representatives often look for a white knight to maintain the company`s core business or negotiate better takeover terms. An example of the former can be seen in the movie “Pretty Woman”, when corporate raider/dark knight Edward Lewis, played by Richard Gere, changed his mind and decided to work with the boss of a company he originally wanted to research. In addition to the White Knights and the Black Knights, there is a third potential takeover candidate, the Grey Knight. A gray/gray knight is not as desirable as a white knight, but he is more desirable than a black knight. The Grey Knight is the third potential bidder in a hostile takeover bid to outbid the White Knight. Although friendlier than a black knight, the gray knight still tries to serve his own interests. Just like the white knight, a white squire is an individual or company that exercises only a minority stake to support a struggling business. This assistance provides the company with enough capital to improve its situation, while allowing the current owners to maintain control. A yellow knight is a company that has planned a hostile takeover attempt, but pulls out and instead proposes a merger of equals with the target company. Similarly, a white squire is an investor or friendly company that buys a stake in a target company to prevent a hostile takeover.
This is comparable to a white knight defense, except that here the target company does not have to give up its independence as with the white knight, because the white squire only buys part of the company. A friendly company that takes control. Reference Black Knights, Grey Knights, and White Squires. The terms white knight and black knight can have their origin in opposing chess. With over 15 years of experience, our firm advises investors across Silicon Valley on complex venture capital transactions. We strive to provide our clients with innovative strategies and legal advice at the best possible price-performance ratio. Although the target company does not remain independent, the takeover by a white knight is always preferred to the hostile takeover. Unlike a hostile takeover, current management typically persists in a blank buyback scenario, and investors get better compensation for their shares.
A white knight is a hostile takeover defense in which a “friendly” person or company acquires a business in due consideration when it is about to be taken over by a “hostile” bidder or acquirer. The hostile bidder is commonly referred to as the “black knight”. Notable examples of white knight rescues include the acquisition of the ABC by the United Paramount Theater in 1953, Bayer`s rescue of Schering from Merck KGaA in 2006, and JPMorgan Chase`s acquisition of Bear Stearns in 2008, which prevented their complete bankruptcy. White Knight Legal advises both investors and companies seeking investments in venture capital and angel capital financing. Some of the most hostile takeover situations include AOL`s purchase of Time Warner for $162 billion in 2000, Sanofi-Aventi`s purchase of biotech company Genzyme for $20.1 billion in 2010, Deutsche Börse AG`s blocked merger with NYSE Euronext in 2011 for $17 billion, and Clorox`s rejection of Carl Icahn`s $10.2 billion takeover bid. in 2011. However, successful hostile takeovers are rare; No unintentional target company acquisition has reached a value of more than $10 billion since 2000. Most often, an acquiring company increases its price per share until the target company`s shareholders and board members are satisfied. It`s especially difficult to buy a large company that doesn`t want to be sold.
Mylan, a global leader in generics, experienced this when it tried unsuccessfully in 2015 to buy Perrigo, the world`s largest manufacturer of branded pharmacy products, for $26 billion. The Immigration Act refers to the rules established by the federal government to determine who is allowed to enter the country and for how long. Party or company that acquires another company in difficulty as part of an amicable and mutually advantageous transaction. Supported by Black`s Law Dictionary, Free 2nd ed., and The Law Dictionary. The vast and complex U.S. economy offers perhaps the greatest potential for products and services in history. We advise investors and companies of all sizes on a variety of equity financings, from seed rounds to late-stage investments. We also act as legal counsel to young and established businesses.
Adam Hayes, Ph.D., CFA, is a financial journalist with 15+ years of experience on Wall Street as a derivatives trader. In addition to his extensive expertise in derivatives trading, Adam is an expert in economics and behavioral finance. Adam holds a master`s degree in economics from the New School for Social Research and a Ph.D. in sociology from the University of Wisconsin-Madison. He holds the CFA designation and holds FINRA Series 7, 55 & 63 licenses. He is currently researching and teaching economic sociology and financial social sciences at the Hebrew University of Jerusalem.