White Knight
Definition
A white knight is a friendly acquirer that a takeover target seeks out as an alternative to a hostile bidder. The target's board negotiates a deal with the white knight — often at a higher price or with better terms and social considerations — to avoid being acquired by the unwanted suitor.
Related terms: a "white squire" buys a significant minority stake (not control) to help block the hostile bidder; a "black knight" is the hostile bidder itself; a "grey knight" is an opportunistic second bidder whose intentions are unclear.
The white knight defense works because boards, consistent with their fiduciary duties (and Revlon duties once a sale is inevitable in Delaware), can favor a superior negotiated transaction. The hostile bidder must then top the white knight's offer or walk away.
Why interviewers ask
White knight is a favorite vocabulary check in M&A interviews — usually inside a broader question about takeover defenses. Being able to rattle off pill, staggered board, white knight, and litigation, with one sentence on each, is the expected answer pattern.
Related terms
Interviews don't test definitions — they test recall under pressure.
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