What Is a Yellow Knight?

The yellow knight refers to the unsuccessful attempt of a company to annex another company, and in the end it can only discuss merger options.

Yellow knight

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The yellow knight is a company attempt

yellow knight company attempt

The Yellow Knight has many reasons to support its acquisition intentions, but the target company also has enough capacity to resist the acquisition. "Yellow" in the Yellow Knights means weak. The Yellow Knight was considered weak because it abandoned its intention to acquire and agreed to negotiate mergers.

A company that was once making a takeover attempt but ends up discussing a merger with the target company. Yellow knights have various reasons for backing out of the takeover attempt, but frequently are attributable to the target company's ability to fend off takeover. The "yellow "in" yellow knight "may refer to the color's association with cowardice. Since a yellow knight backs down from a takeover attempt and retreats to merger discussions, a yellow knight may be viewed as weak. ^[1]