greenmail Hear it!

greenmail definition - finance
A payment made to the potential acquirer of a company in a hostile takeover attempt. The company agrees to buy the potential acquirerÂ’s shares at a premium if the acquirer agrees to stop the takeover attempt and not undertake any more for a certain period of time. This process is also called a targeted stock repurchase payment; critics of it say it is little more than a bribe, hence the term greenmail.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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