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White Knight

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A white knight is a friendly bidder who steps in to help a company that is having financial difficulties. The efforts of a white knight often occur during a takeover: the white knight makes a friendly bid to buy the struggling company in order to avoid the unwanted change in ownership. A white knight may do this voluntarily, or may be asked to do this by a company's management (this doesn't mean that the white knight will pull out after the bidding is complete). A white knight may also try to save a struggling company by simply putting money into that company. If a company is doing poorly financially, no other entities might be interested in it. The white knight accepts a significant risk when acquiring an indebted or bankrupt company. After acquisition, the white knight may try to rebuild the firm.



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