Greenmail meaning

grēnmāl
The practice of selling shares of a company back to existing shareholders at a price substantially higher than that at which they were bought in exchange for discontinuing a hostile takeover.
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The buying of a large amount of a company's stock in anticipation that the management, fearing that the buyer will gain control, will buy it back at a premium over the market price.
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A payment made to the potential acquirer of a company in a hostile takeover attempt. The company agrees to buy the potential acquirer’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.
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The act of purchasing shares in a publicly traded company that could be used to support a hostile takeover, and then selling them back to the company at a profit.
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Profiting from an attempted hostile takeover by forcing the target company to buy back the hostile bidder's shares at an inflated price.
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Origin of greenmail

  • green money (black)mail

    From American Heritage Dictionary of the English Language, 5th Edition

  • Blend of greenback and blackmail

    From Wiktionary