White Knight
Definition
A white knight is a friendly buyer that a company under hostile attack invites in as an alternative acquirer. The target still gets sold, but to a bidder its board prefers, often one that promises to keep management or pay a better price.
In practice
Gulf Oil escaped T. Boone Pickens by selling itself to Chevron, the classic white-knight exit. The tactic concedes the company’s independence to deny the raider the prize, which is why courts treat the choice between bidders carefully once a sale is inevitable.