White Knight and The Lady Macbeth Strategy

Driven from Shakespeare’s character Lady Macbeth who appeared noble and virtuous just to get their own way even if the outcome is bad for others.

 

Lady Macbeth Strategy is a corporate hostile takeover strategy where a third party portrays as a white knight and then switches sides in favor of the other unfriendly party.

 

Under the Lady Macbeth strategy, the acquirers aka white knights will portray as the heroic savior and pretend that after the acquisition they will be working with you in unison and help run the company against the pure will of the hostile partners.

 

The White knight usually gets a benefit of the trust and immense help needed, getting a discount on the premium paid for the shares they purchased.

 

Yes, the company loses the share and authority when sold to a third party, but they do this under the belief that the dilution would turn out to be better for the company and they’ll still be able to team up with the white knight to run it.

 

Although hostile takeovers and Lady Macbeth Strategies happen very rarely, it’s always better to be on the safe side and know the partners well in advance before selling a share of your company to them and regretting later.

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