Greenmail

Greenmail,

Definition of Greenmail:

  1. The practice of buying enough shares in a company to threaten a takeover, forcing the owners to buy them back at a higher price in order to retain control.

  2. Forcing a firm to buy its own stock (shares) at an inflated price, to ward off a corporate raider who holds enough stock to pose a hostile takeover threat. It is a type of blackmail (which, in the US, calls for a lot of greenbacks the nickname for US dollars) that nets a raider a handsome profit just for creating a takeover threat.

  3. Like blackmail, greenmail is money paid to an entity to stop or prevent aggressive behavior. In mergers and acquisitions, it is an anti-takeover measure in which the target company pays a premium, known as greenmail, to purchase its own shares back at inflated prices from a corporate raider. After accepting the greenmail payment, the raider generally agrees to discontinue the takeover and not buy any more shares for a specific time.

  4. Greenmail is the practice of buying enough shares in a company to threaten a hostile takeover so that the target company will instead repurchase its shares at a premium. Regarding mergers and acquisitions, the company makes a greenmail payment as a defensive measure to stop the takeover bid. The target company must repurchase the stock at a substantial premium to thwart the takeover, which results in a considerable profit for the greenmailer.

How to use Greenmail in a sentence?

  1. The target company can resist the takeover attempt by repurchasing its shares at a premium from the greenmailer.
  2. Anti-greenmail provisions, laws, regulations, and taxes made greenmail more difficult after the 1980s.
  3. Greenmail became more frequent and controversial during the 1980s.
  4. Greenmail is a practice whereby a greenmailer buys up a substantial block of a company's shares and threatens a hostile takeover.
  5. Critics see greenmail as a predatory practice similar to extortion, but it can be defended as a free-market solution to disputes between shareholders.
  6. I was acquiring businesses through leveraged buyouts and greenmail which with more forethought I would have left well alone.

Meaning of Greenmail & Greenmail Definition

Greenmail,

Greenmail: What is the Meaning of Greenmail?

  • Greenmail is in the habit of buying enough shares in a company that threatens the target company with a profitable tax target to repurchase its shares at a premium. In the case of mergers and acquisitions, as a defense measure, companies will pay green to prevent takeover bids. The target company had to repurchase the shares at a premium to stop the acquisition, which was a big plus for Green Mailer.

    • Green Mail is an exercise in which a green mailer buys a large amount of stock in a company and threatens to take over.
    • The target company may reject the takeover offer by purchasing its premium shares from Green Mailer.
    • Greenmail became more common and controversial in the 1980's.
    • Greenmail rules, laws, regulations and taxes have made greenmail difficult since the 1980s.
    • Critics see greenmail as a predatory process, like blackmail, but a market-based solution to shareholder disputes.

  • The company pays any amount to the shareholders to return their shares directly or indirectly.

Meanings of Greenmail

  1. The process of buying enough stock to risk taxing a company and forcing its owners to repurchase it at a higher price to maintain control.

Sentences of Greenmail

  1. He bought the company through Leveraged Buyout and Green Mail, which he left alone with more vision.