White Knight

In the world of mergers, there are all different colors of knights. A white knight only exists when there’s also a black knight, just like a hero only exists in the movies if there’s a villian.

Black knights are fiendish companies, threatening unwelcome takeovers of other companies. White knights rescue these damsel-in-distress companies from the evil black knights, saving the day.

If a company gets taken over by either a black or white knight, what’s the difference? Black knights will purportedly have their way—there’s a reason their bid is unwelcome in the first place. White knights oftentimes leave the current management in place, a relatively pleasant scenario for the bought-out company. Investors also prefer white knights, as white knight takeovers usually mean more money in their pockets than a black knight takeover.

Hostile takeovers (successful ones) don’t happen too often, but they do happen. They happen even less often when white knights ride in and triumphantly save the day. There are other color knights, and even “squires” in keeping with this strange medieval theme, so if you hear about them, now you know they’re not being literal or colloquially metaphorical.