What is a gray knight?
Sometimes known as a gray knight, the gray knight is an entity that enters the process of offering companies without inviting. In most situations, this type of candidate is not considered a friend or enemy of the company that offers offers. This is, unlike the White Knight, which is a candidate with whom the target company would rather work, and the Black Knight, which represents a company that wants a hostile takeover.
There is some difference in opinions on the role of the gray knight when taking off the bids. In general, this candidate is not considered a threat to the target company, as well as the Black Knight. Although there is an agreement that the gray knight is primarily interested in the company for its own purposes, the target company usually has a reason to believe that the acquisition would not mean dissolution of business or other negative consequences for the company. In this sense, a candidate who is considered to be a grayeen as a fair alternative if the preferred or white candidate is unable to achieve an agreement with the targetOva firm.
Other opinions on the role of a gray knight tend to emphasize that the candidate is primarily focused on what can be obtained in obtaining, especially if the white knight returns from the agreement. From this point of view, the gray knight is sometimes considered to be a potentially malevolent power that is simply waiting for a collapse of a popular agreement. At this point, the less advantageous candidate moves quickly to complete the takeover, often at a price that is less than the original offer.
The basic strategy of the gray knight includes an extension of the offer that is slightly higher than the offer that is placed by the white knight. This will effectively build a gray candidate as another logical choice if something happens to harm the negotiations between the target company and the preferred Bidder. If the White Knight has decided not to continue taking over, the gray knight can let the original offer stand or with a lower offer that would still block any attempty to take over the black knight. The accurate strategy used will depend a lot on both specifics of the circumstances surrounding the action, as well as on any laws or regulations that can regulate the process of aquisition acquisitions in the nation where the target company is located.