Yellow Knight
What is a Yellow Knight?
A yellow knight is a company that backs out of an attempt to take over another company.
How Does a Yellow Knight Work?
Let's assume Company XYZ wants to acquire Company ABC. Company ABC feels that Company XYZ is a hostile bidder and will ruin the company. As a result, Company ABC's directors go on the offensive and tell the shareholders that a sale to Company XYZ would not be a good thing.
Company XYZ, fearing a legal battle and little support from shareholders on both sides, backs off. That is, it becomes a yellow knight. Instead, Company XYZ comes back to Company ABC on more friendly terms and proposes a merger.
Why Does a Yellow Knight Matter?
Yellow knights are yellow because the color is associated with cowardice.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
