greenmail


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Related to greenmail: poison pill

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 practice in which a corporate raider buys a large amount of stock from another publicly-traded company and forces the latter to buy back the stock at a substantial premium in order to avoid a takeover. The corporate raider has no intention of actually buying the target company; it merely seeks to profit from the buyback. One refers to this buyback as a bon voyage bonus, as this enables the company to be left alone by the greenmailer. Some companies formulate anti-greenmail provisions in their charters or bylaws to prevent the situation from occurring in the first place.

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.

greenmail

see TAKEOVER BID.

greenmail

see TAKEOVER BID.
References in periodicals archive ?
Greenmail, white knights and shareholders' interests.
Greenmail is "the purchase of a substantial block of the subject company's securities by an unfriendly suitor with the primary purpose of coercing the subject company into repurchasing the block at a premium over the amount paid by the suitor.
Although not entirely clear, even before the enactment of section 162(k) greenmail payments were presumably nondeductible.
In addition to withdrawing TAM 8516002, TAM 8626001 specifically considered the treatment of greenmail payments.
Also, management responses to potential takeovers such as golden parachutes, greenmail, shark repellents, poison pills, and lobbying for changes in state laws are considered.
This method may protect an investor in a severe market downturn, but it can contribute to management complacency, thereby inviting greenmail, takeover, or restructure.
Today the monopoly of American business is coming on a tide of greenmail, friendly or hostile takeovers and leveraged buyouts.
And how in good conscience can a lead director, who's just overseen the loss of more than $4 billion in sales in a single year, demand as he exits the scene that the company give him, as greenmail, the right, not available to other shareholders, to register the sale of his shares, which he then did in one fell swoop on August 26.
Those enhanced returns may flow from the payment of greenmail, market movement created by rumors of the offeror's activities, or the involvement of a "white knight" or other competing bidder.
Nevertheless, greenmail still occurs, (116) and it can be characterized
Since they lobby publicly from a minority position, activist hedge funds typically seek (and probably require) more traditional stockholders to agree with proposed governance changes, making this strategy similar to virtuous greenmail when it works m this fashion.
The most notable of these institutional investors are large pension funds such as CalPERS and TIAA-CREF, both of which specifically discourage the use of unequal voting, secret ballot, supermajority requirements, staggered boards, greenmail, and poison pills, all of which are components of the Gompers et al.