White Knight is a crucial concept in the world of corporate takeovers and mergers. It refers to a friendly investor or company that acquires a target firm facing a hostile takeover attempt. The term is often used in business and finance to describe a savior who steps in to protect the target company’s interests, management, and shareholders from an unwelcome bidder. Understanding this concept is essential for investors, traders, and business students who want to grasp corporate defense strategies.

In simple terms, when a company becomes the target of a hostile takeover—where another company attempts to acquire it without the approval of its management—a White Knight may intervene to purchase the target company instead. This friendly acquirer usually offers fairer terms and ensures that the existing management continues to operate the business. This makes the White Knight an appealing alternative compared to the hostile bidder, often called the Black Knight.

The role of a White Knight is not only to prevent loss of control but also to preserve the company’s values, culture, and long-term goals. Such takeovers can maintain market stability and protect investor confidence. However, companies must ensure all takeover activities comply with SEBI (Securities and Exchange Board of India) regulations, which govern transparency, disclosure, and fairness in acquisition processes.

For investors, understanding the dynamics of White Knight interventions helps in analyzing merger and acquisition (M&A) opportunities and risks. It also highlights the importance of corporate governance and strategic alliances in protecting shareholder value. In essence, a White Knight represents a protective mechanism that balances business interests, investor trust, and regulatory integrity within the financial ecosystem.