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Finance Dictionary and Glossary of Investment Terms
A potential acquirer which outbids a white knight in pursuit of its own best interests. This scenario is less preferable to the target company's initial hostile takeover attempt.
A second, unsolicited bidder in a corporate takeover. A gray knight enters the scene in order to take advantage of any problems between the first bidder and the target company.
In a merger or acquisitions, a gray knight is an acquiring company that outbids a white knight in pursuit of its own best interests, although it is friendlier than a hostile bidder.