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 sample was not restricted with regard to any other financial or economic information, apart from the announcement of a greenmail offer, which might have had an effect on the excess returns generated in a LBB.
Kosnik (1987) examined reciprocated interlocks in her study of the payment of greenmail and found that they led to an increase in the likelihood of the payment of greenmail, and we expect that will generalize to other forms of antitakeover defenses.
Effects of board demography and directors' incentives on corporate greenmail decisions.
Effects of board demography and director's incentives on corporate greenmail decisions.
Effects of board demography and directors incentives on corporate greenmail decisions.
1991), payment of greenmail (Kosnik, 1987, 1990), take over resistance (Buchholz and Ribbens, 1994; Singh and Harianto, 1989), restructuring (Bethel and Liebeskind, 1993; Johnson et al.
A Carlisle museum's display on the reivers says rent paid to landowners was greenmail and protection money paid to reiving families was blackmail.
The negative prediction errors for the total samples tend to be dominated by three proposals: the repeal of classified boards, the repeal of poison pill securities, and the banning of golden parachutes or greenmail.
The company sued for injunctive relief, arguing that the shareholder had a fiduciary responsibility not to end the S status nor greenmail the company.
Gillette bought back Perelman's stock for a tidy $34 million premium, and Coniston's for another $35 million, which McKibben insists was not greenmail.
Joe mentioned various defenses the company could pursue, such as a poison-pill resolution, a proxy fight or even greenmail.