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 ?
"The Canadian securities law regime differs significantly from the regulatory environment in the United States which prompted the creation of the Pill and which permits two-tier front-end loaded junk bond-financed bust-up acquisitions, street sweeps and greenmail." Gordon Coleman, "Poison Pills in Canada" (1988) Can.
Esta relacion estrategica solo duraria pocos anos, ya que Santodomingo ataco a los paisas haciendo uso del greenmail en Suramericana, para hacerse al poder de Cerveceria Union.
Nevertheless, greenmail still occurs, (116) and it can be characterized
(53) Goodyear succeeded in retaining control of the company, but at a cost of $90 million in greenmail (54) to Goldsmith and, according to some, the "abandonment of its long-term corporate strategy." (55) Goodyear's publicity campaign against the attack on a "treasured midwestern 'institution'" (56) helped set the stage for legislation to slow foreign investment.
Greenmail is a cut above ordinary email because it makes messages safe using bespoke encryption technologies, prevents spam junk mail, stops people sending mail to the wrong recipient, tells the sender when their message has been read, and gives a genuine recall facility if the sender gets it wrong--which can save red faces all round!
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.
"We are not interested in playing a game that some would describe as 'greenmail.'"
First, the repurchase can be considered as greenmail, if the company buys back stock from a potential raider at a premium above the market price.
The past two decades have been a rough ride for Carteret, N.J.-based Pathmark Stores, starting with an unfortunate greenmail attempt, a leveraged buyout by Merrill Lynch shortly thereafter, and later, an acquisition deal with Ahold that was quashed by the Federal Trade Commission.
The study did not include companies that repurchased their stock because of a greenmail threat.
As the mystery progresses, readers seamlessly learn both the meaning and the downside for shareholders of corporate use of "poison pills," "greenmail," "option-repricing," "golden parachutes," and "political entrepreneurship." Wilson goes for the jugular.