why are these types of companies called yellow knights because yellow is a color associated among other things with cowardice and deceit 
the term yellow knight is derogatory as it implies that the hostile bidder got cold feet and chickened out of the takeover attempt leaving it in a weak bargaining position other types of knightsin mergers and acquisitions m a the buying company may be described as a knight of any one of four different colors other than yellow knights there are black knights make unwelcome hostile takeover bids and unlike yellow knights stand their ground these types of predators are the source of nightmares for target company management as they bully their way into power and usually have goals that deviate from what the current bosses are trying to achieve the opposite of black knights white knights are the friendly forces tasked with rescuing the target from the clutches of another prospective buyer with intentions to bleed it dry to make a quick profit often company officials will seek out a white knight to preserve its core business or to negotiate better takeover terms the white knight might agree to play this role in exchange for some incentives such as paying a smaller premium to take control than otherwise would be required under competitive bid conditions grey knights as their color suggests sit somewhere between white and black knights though not as desirable as the former they are at least viewed as a more appealing option than the latter gray knights capitalize on the fact that they are perceived as a friendlier alternative to a hostile black knight and use that as a negotiating chip to get a more favorable deal when a persistent unwanted predator comes calling 