WHITE KNIGHT

noun (Business World) In financial jargon, a company that comes to the rescue of one facing a hostile take-over bid. Etymology: A figurative use that is perhaps a mixed metaphor: on the one hand it relies on the fairy-tale image of the knight on the white charger who appears at the last moment to rescue the damsel in distress, on the other on the imagery of black (bad) and white (good). The white knight is also a character in Lewis Carroll's Alice Through the Looking Glass who is full of enthusiasm but has little common sense: He was dressed in tin armour, which seemed to fit him very badly, and he had a queer-shaped little deal box fastened across his shoulders upside down, and with the lid hanging open...'I see you're admiring my little box,' the Knight said in a friendly tone. 'It's my own invention--to keep clothes and sandwiches in. You see I carry it upside down so that the rain can't get in.' By the end of the nineteenth century the term white knight was already in figurative use in English to refer to a person who, like Carroll's character, is enthusiastic but ineffectual (but this seems unconnected with the present development). It had acquired the secondary meaning 'a hero or champion' in more general contexts in the early 1970s before being taken up in this specialized financial sense. History and Usage: The first uses of white knight in the context of corporate take-overs date from the very beginning of the eighties; once established, the term was applied specifically to a corporate counter-bidder who comes into play to force a bid battle with the company trying to take over. As the decade progressed, so did the imagery: by 1987 the term white squire had been coined, for an individual who buys a large shareholding in a company facing a take-over so as to make it less attractive to the bidder. (The squire is a little less powerful than the knight, and enters the fray at the first rumour of a take-over, whereas the knight charges in at the last moment to save the day.) Much speculation surrounds the future of the near-40 p.c. equity stake held by the 'white squires' who helped Standard see off Lloyds Bank's ø1.3 billion bid two years ago. Daily Telegraph 15 Aug. 1988, p. 22 Adia...launched a hostile bid for Hestair...When Hestair found a white knight, BET, Adia refused to enter a bidding war. Business Apr. 1990, p. 81