A provision in a corporate charter forbidding the payment of a bon voyage bonus without the approval of a given majority of shareholders. Greenmailing is 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. One refers to this buyback as the bon voyage bonus, as this enables the company to be left alone by the greenmailer. An anti-greenmail provision discourages corporate raiders from greenmailing in the first place as it makes the bon voyage bonus more difficult to receive, which may result in the greenmailer becoming stuck with ownership of shares he/she does not actually want.
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A provision in a firm's charter that prohibits management from purchasing a large shareholder's stock at a premium price without extending the same offer to other shareholders. Compare greenmail.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.