Black Knight

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Definition: Black Knight

Black knight is a concept when a company or a person forcibly tries to buyout a company, even when the other party is unwilling to sell it. In this case, there is no mutual understanding between the two companies and the entire business transaction leaves a bad taste. A superior company often ends up being a black knight when they take over a smaller firm.

Because of such a hostile takeover, there is are unpleasant relations between the two parties. The black knight is the one who uses financial power to buy over the shareholders. This is not particularly appreciated by the employees and the management.

In the case of a black knight takeover, the bigger company forcefully acquires a majority share in the smaller company, without keeping the board in the loop.


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