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An anti-greenmail provision whereby a publicly-traded company sells a significant portion of its stock to a friendly company, usually at a discount to its market value. Greenmail is a practice in which a corporate raider buys stock directly from shareholders with no intention to actually take over the company, but instead wishes to force the company to buy back its own shares at a significant premium. When the target company engages in whitemail, it sells its shares to the friendly company in the belief or assurance that the friendly company will sell to the corporate raider only at a significant premium. Whitemail makes the greenmail more expensive for the corporate raider, who may then be forced to abandon the attempt.
A takeover target's sale of a large number of its own shares at a bargain price to a friendly party. Whitemail causes a takeover to become more difficult and expensive because a corporate raider must purchase additional shares from a party friendly to the target company.