White Knight (business)

Information about White Knight (business)

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. Alternatively, a gray knight is an acquiring company that enters a bid for a hostile takeover in addition to the target firm and first bidder, perceived as more favorable than the black knight (unfriendly bidder), but less favorable than the white knight (friendly bidder).

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.

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.

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. A white squire doesn't have the intent to take over a company, but rather serves as a figurehead to a defense to a hostile takeover. The white squire may often also get special voting rights for their equity stake. An example of a white squire might be Warren Buffett.

Examples of white knights

1953 - United Paramount Theaters buys nearly bankrupt ABC
1982 - Allied Corporation buys Bendix Corporation in a situation involving the "Pac-Man defense". Allied is drafted in when the company that Bendix tries a hostile takeover on fights back by buying up Bendix stock in attempt to create a reverse hostile takeover.
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, resulting in the Enron scandal.)
2003 - SAP was seen by analysts as the most likely to help defeat Oracle's hostile for PeopleSoft, however it came to nothing.
2006 - Severstal almost acted as a white knight to Arcelor as the merger negotiations were in place between Arcelor and Mittal Steel
2007 - Nissin launching a friendly 37bn yen ($314m; £166m) bid for Myojo Foods after US hedge fund Steel Partners offered 29bn yen to buy the firm.^[1]

References

1. ^ Cup Noodle white knight ups bid

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United Paramount Theatres, one of the largest chain of cinemas in the United States was divested from Paramount Pictures as a result of the 1948 United States v. Paramount Pictures, Inc. Supreme Court case. In 1953 the chain merged with the American Broadcasting Company.
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American Broadcasting Company (ABC)

Type Broadcast radio network and
television network
Country United States
Availability
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AlliedSignal was an aerospace, automotive and engineering company that acquired and merged with Honeywell for $15Bn in 1999, after which the new group adopted the Honeywell name.
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Bendix Corporation was founded in 1924 in South Bend, Indiana by the inventor Vincent Bendix. At first it manufactured brake systems for cars and trucks. It supplied General Motors with braking systems for its production lines for several decades.
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The most quoted example in U.S.
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George Soros (pronounced [ʃoroʃ]) (born August 12, 1930, in Budapest, Hungary, as György Schwartz) is an American financial speculator, stock investor, philanthropist, and political activist.
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Harken Energy Corporation (AMEX: HKN ) is an American oil and gas company, headquartered in Southlake, Texas. Its shares trade publicly on the American Stock Exchange.

Harken has attracted attention because of the role played in its affairs in the 1980s by George W.
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Spectrum 7 was an oil company started by William DeWitt and Mercer Reynolds.

In 1984, Spectrum 7 merged with George W. Bush's Arbusto Energy. After the merger, Bush became the Chairman and CEO of Spectrum 7.

In 1986, after reporting a net loss of $1.
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The company was formed by Rod Canion, Jim Harris and Bill Murto — former Texas Instruments senior managers.
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Digital Equipment Corporation was a pioneering American company in the computer industry. It is often referred to within the computing industry as DEC. (This acronym was frequently officially used by Digital itself,^[1] but the official name was always DIGITAL.
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Dynegy Inc.

Public (NYSE: DYN )
Founded 1984 as Natural Gas Clearinghouse
Headquarters Houston, Texas, USA

Key people Bruce A. Williamson, Chairman and CEO
Stephen A.
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Enron Creditors Recovery Corporation

Defunct / Asset-less Shell
Founded Omaha, Nebraska, 1985
Headquarters Houston, Texas, USA

Key people Kenneth Lay, Founder, former Chairman and CEO
Jeffrey Skilling, former CEO and COO
Andrew Fastow, former CFO
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SAP AG

Aktiengesellschaft
(ISIN: DE0007164600 , FWB: SAP , NYSE: SAP )
Founded Weinheim (1972)
Headquarters Walldorf, Germany

Key people Henning Kagermann, CEO
Hasso Plattner, Chairman of the Supervisory Board
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Oracle Corporation

Public (NASDAQ: ORCL )
Founded California, USA (1977)^[1]
Headquarters Redwood Shores, California, USA

Key people Lawrence (Larry) J. Ellison, CEO
Jeffrey O. Henley, Chairman
Safra A.
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PeopleSoft, Inc.
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Nisshin, Nissin (pronounced the same, written as 日清, 日新, 日真, etc.) in Japanese may refer to:

Geography

日進市: Nisshin, Aichi, a city in Aichi Prefecture, Japan, near the city of Nagoya

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