White Knight

Another fortune way to handle a hostile takeover is through White Knight bidders. Competition is ever a serious factor in any market field. Usually players of some specific market, know each other for a long time, even if from different countries. They know each ones history, strategy, strength, advantages, clients, bankers and legal supporters. Meaning beyond similarities or not, there're communities around theses companies.

An unsolicited bidder more than an offensiveness, has a chain reaction over that entire market field. Even traditional corporations are not free of billion raiders that wants to run the market. Or maybe, it's about a bidder without any common work concepts that could make promise a good union. Several are the reasons, an hostile act itself seems not something friendly.

Under these circumstances, investment bankers can achieve a White Knight raider to also play against the unsolicited takeover. The White Knight presence and play, may have at least two main effects. First it can push the hostile takeover bid till the edge, and break-even point. Second, if result in attack quit, a new megacorporation can surge, stronger than ever. For the target company is a good strategy, once it makes takeover defense mostly to be decided in the stock exchange, between bankers, traders, analysts. Commonly, if results a White Knight union, sometimes it's just an alliance already studied and waited for both. Anticipation of alliances can be unexpected but nevertheless, market may prove it was right.

Same Philosophy of Job

The merger may not be the best end and begining of it all. A partnership may be the proper way for both corporations. A joint venture without the creation of a third company may be the exact solution. Creating a huge corporation may cause a confusion of corporation identity hard to be undone if necessary. Nowadays, keep doing all the workout together, may be enough for both corporations.

For the White Knight, the merger may be not only out of future plans, but can also create commitments not expected. If there´s a similarity of work strategy and management, this may be enough for a partnership. From a realistic standpoint, a White Knight can carry out the corporation into more problems instead of making it stronger.

Further texts:

Raiders Profile Some overview regarding raiders of corporation and their procedures to takeover