TLDR:
A white knight is a friendly acquirer who rescues a target company from an unwanted hostile takeover by offering a more attractive acquisition on terms acceptable to the target’s management and board.
White Knight vs. White Squire
A ‘white squire’ is a variation of the white knight defense where a friendly investor takes a significant but non-controlling minority stake in the target company. Unlike a white knight who acquires the whole company, the white squire simply makes the target less attractive or more expensive for the hostile bidder by diluting their potential ownership. White squire arrangements often come with standstill agreements (the squire won’t increase their ownership beyond a set limit) and anti-dilution protections. Warren Buffett’s investments in companies facing hostile takeovers have sometimes served as white squire arrangements.