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greenmail

   Also found in: Dictionary/thesaurus, Legal, Encyclopedia, Wikipedia, Hutchinson 0.03 sec.
Greenmail
A situation in which a large block of stock is held by an unfriendly company. This forces the target company to repurchase the stock at a substantial premium to prevent a takeover. It is also known as a "Bon Voyage Bonus" or a "Goodbye Kiss".

Notes:
Not unlike blackmail, this is a dirty tactic, but it's very effective.

Greenmail
The holding of a large block of stock of a target company by an unfriendly company, with the object of forcing the target company to repurchase the stock at a substantial premium to prevent a takeover.
greenmail
A defensive maneuver aimed at thwarting a potential takeover in which the target firm purchases shares of its own stock from a raider at a price above that available to other stockholders, who are ordinarily excluded from the transaction. Funds to finance greenmail are often borrowed, in which case the target company may end up with substantial additional debt. Also called negotiated share repurchase. Compare antigreenmail provision. See also fair price amendment.
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Despite opposition from Disney's board, shareholders voted in favor of a proposal to stop greenmail - the payment of money to appease a proxy contest or takeover threat.
MAGIC DAY FOR DISNEY BOARD NO SQUEAKER AS SHAREHOLDERS SHOW SUPPORT by Daily News (Los Angeles, CA)
During the takeover battles of the 1980's, abuses like greenmail and poison pills even led Congress to consider legislation to enfranchise shareholders.
Shareholder democracy: Led by an unlikely activist, the years-long ... by Millman, Gregory J. / Chief Executive (U.S.)
The company sued for injunctive relief, arguing that the shareholder had a fiduciary responsibility not to end the S status nor greenmail the company.
Current developments by Karlinsky, Stewart S. / The Tax Adviser
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