White knight
M&A / Merger ModelA friendly bidder a target invites to make a competing offer against a hostile approach.
Faced with an unwelcome bid, a target board can look for a buyer it would rather be owned by. The white knight makes a competing offer, ideally at a higher price and on terms the board can recommend.
It is one of the few defences available in the UK, because Rule 21 of the Takeover Code blocks most frustrating action without shareholder approval but does not stop a board seeking a better deal. Soliciting a rival bidder is not frustrating action, it is advocacy for shareholders.
The related white squire is a friendly party that takes a significant minority stake rather than the whole company, blocking the hostile bidder from reaching control without a full takeover.
The tactic has an obvious limit: it requires someone willing to pay more, and inviting a competitive auction can end with the company sold anyway, simply to a different owner.