In business, a white knight may be a corporation, a private company, or a person that intends to help another firm. There are many types of white knights. Wall Street, Manhattan In economics, business refers to the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals. ... A corporation is a legal person which, while being composed of natural persons, exists completely separately from them. ...

The first type refers to the friendly acquirer of a target firm in a hostile takeover attempt by another firm. The intention of the acquisition is to circumvent the takeover of the object of interest by a third, unfriendly entity, which is perceived to be less favorable. The knight might defeat the undesirable entity by offering a higher and more enticing bid, or strike a favorable deal with the management of the object of acquisition. A takeover in commerce refers to one company (the acquirer) purchasing another (the target). ... // Engineering In engineering, the term acquisition has the following meanings: In satellite communications, the process of locking tracking equipment on a signal from a communications satellite. ...

In short, if Company T (target) is going to be acquired by Company H (hostile firm), but Company A (acquirer) can acquire ownership of Company T, then Company A would be acting as the white knight.

The second type refers to the acquirer of a struggling firm that may not necessarily be under threat by a hostile firm. The financial standing of the struggling firm could prevent any other entity being interested in an acquisition. The firm may already have huge debts to pay to its creditors, or worse, may already be bankrupt. In such a case, the knight, under huge risk, acquires the firm that is in crisis. After acquisition, the knight then rebuilds the firm, or integrates it into itself. A creditor is a party (e. ... Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. ...

White Squire

A white squire is similar to a white knight, except that it only exercises a significant minority stake, as opposed to a majority stake.

Examples of White Knights

• 1986 - George Soros's Harken Energy buying George W. Bush's Spectrum 7
• 1998 - Compaq merging with financially weak DEC
• 2001 - Dynegy attempts to merge with Enron to cover Enron's massive debts (the merger failed as it became obvious that Enron had been committing fraud)

George Soros George Soros (pronounced ) (born August 12, 1930 in Budapest, Hungary as György Schwartz) is a financial speculator, stock investor, philanthropist, liberal political activist and philosopher. ... Harken Energy Corporation is an American oil and gas company, having its headquarters in Southlake, Texas. ... George Walker Bush (born July 6, 1946) is the 43rd and current President of the United States and a former governor of Texas. ... Spectrum 7 was an oil company started by William DeWitt and Mercer Reynolds. ... Compaq was a personal computer company founded in 1982 by Rod Canion, Jim Harris and Bill Murto. ... Digital Equipment Corporation was a pioneering company in the American computer industry. ... Dynegy is a large operator of power plants and a player in the natural gas liquids business, based in Houston, Texas. ... Enron Corporation is an energy company based in Houston, Texas. ...

See also

• Economics
• Takeover
• Microeconomics
• Industrial organization