Business, Legal & Accounting Glossary
A company that made a takeover attempt but is now discussing a merger with the target company instead.
A corporation that at one time was planning on initiating a hostile attempt on a company, but instead decides to propose a merger deal between the two. This may be done for a variety of reasons, but mainly the company that was planning the takeover believes that another approach would yield better results.
A yellow knight is a corporation that attempted a hostile takeover of another but decided against it due to a change in strategy. Yellow connotes cowardice, which in this instance relates to the act of fleeing an attempted takeover.
There are a variety of reasons why an acquiring business may be discouraged from pursuing a hostile takeover. The company initiating the takeover may have determined that its strategy is no longer viable. For instance, the acquiring party may discover halfway through the takeover that additional resources are required to close the acquisition than anticipated. In certain instances, the targeted company may already have modified its strategic plan in order to avert the takeover.
If there is a genuine reason to proceed with the takeover, the process of acquiring the targeted company may incorporate a more moderate approach that benefits both sides.
Gray Knight
White Squire
White Knight
Mergers and Acquisitions
Black Knight
Hostile Takeover
Defensive Merger
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This glossary post was last updated: 21st January, 2022 | 0 Views.