What Is a Yellow Knight?
In the business world, Various colored knights are used to identify the nature of a takeover or potential takeover. A company that attempts to make a hostile takeover of the target company, but then retreats is called a yellow knight. This company then proposes a merger instead. This sudden change usually occurs when a yellow knight finds out that they are not able to afford a takeover due to some reasons such as more cost than the expected amount, or the target company’s defense. In this case, the yellow knight might find itself in a weak bargaining position, forcing it to walk away or propose a friendly merger as an alternative. In brief, yellow knights are a case of if you can’t beat them, join them.
