Investing for Beginners , investing

A white knight is a friendly (for the target) bidder who gives a better offer to acquire stake in the company than “hostile” bidder during hostile takeover. White knight is one of the strategies used to avoid hostile takeover, however, it may not depend on target’s management. Someone has to invest its money in stocks and risk investment amount.

A ‘white knight’ also may buy-out a company without a case of hostile takeover, but save a company when it is in a financial trouble and is facing solvency problems. Then such companies are still expecting that business won’t be shut down and company will be saved by some new investor. Because of the saver role such investors are called as ‘white knights’ the name of which comes from tales…