White Knights

Question

White Knights

Quizplus · Accepted Answer

White knights are companies that offer a higher purchase price and more friendly offer in the event of an unsolicited and unfriendly takeover attempt. This is done to save the target company from being taken over by the hostile bidder. Option A is incorrect as they advise companies on ways to avoid a takeover, but the term 'White Knights' refers to the company that comes in to rescue the target company. Option C is incorrect as White Knights are not investors, they are usually established companies who are invited by the target company to help. Option D is also incorrect as White Knights are not interested in buying depressed stock, they are interested in acquiring the target company.