A white knight is a takeover defense in which a firm issues securities that give their holders certain rights that become effective when a takeover is attempted and that make the target firm less desirable to a hostile acquirer.

Question

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A white knight is a friendly investor or company that acquires a corporation at fair consideration when it is under the threat of a hostile takeover, not a takeover defense mechanism involving the issuance of securities with special rights.

A White Knight Is a Takeover Defense in Which a Firm