What is a business, what is a white knight?
The White Knight is a friendly savior in the business world that helps society by buying it when it is either in the middle of an attempt to take over, or when the company is either almost bankrupt or failed due to unpaid debts. This term must be unlike black knight : a person, group or corporation that initiates enemy takeover. Another related term is Gray Knight : A person, group, or corporation that initiates takeover, which is not what the trade wants in trouble, but is perceived as a better alternative than the black knight. The gray knight could take over the company with some concessions to maintain employees or employees, while the Black Knight mercilessly replaces employees and management with their own corporation. On the contrary, the white knight, on the contrary, will generally try to maintain the same employees, but by sealing money into the company to help restore it.
As already mentioned, the white knight can be a single person. The white knight can bI can alternately with a group of investors or other companies intending to either save the company from bankruptcy, help companies after bankruptcy or prevent hostile takeover. The related term White Squire is used to describe people who buy a minority share in society. They do not take companies, but their interest can provide them with sufficient voting power in combination with other shareholders to prevent enemy takeover.
The goal of the white knight is not completely altruistic. These knights may perceive profitability in obtaining or merging with society. Few people spend millions or even billions of dollars simply to save a company without thinking about the personal or corporate benefits they can benefit. For example, when United Paramount Theater (UPT) bought ABC in 1953, they acted as a white knight because ABC was almost a bankruptcy. Yet they simply did not act pRO ABC, hoping they would get a society that they could turn around to make more profits. UPT money transferred to the net was eventually created a network that could fully compete with the more popular CBS and NBC networks.
The recent example of the White Knight is the acquisition of Country Weally Financial, the mortgage company Bank of America 2008. Initially, the risk of acquisition of society is high due to a significant decrease in new mortgages and mortgages on Subprime. However, when the housing market turns, Bank of America removed a competitor, which could prove to be very profitable.
Like any old knight, a white knight gets a company with money with problems with a particular risk for themselves, investors or society. For Bank of America, it meant raising a national financial fund to obtain a debt of about $ 100 billion in the US (USD), mostly in the form of mortgages. Bank of America is betting on its own financial power, the way out of the subspecies crisis providedA and the future of the ability to offer loans more people when the housing market begins to scaling.