Greenmail (Noun)
Meaning
(corporation) the practice of purchasing enough shares in a firm to threaten a takeover and thereby forcing the owners to buy those shares back at a premium in order to stay in business.
Classification
Nouns denoting acts or actions.
Examples
- The investor was accused of using greenmail tactics against the company to force a payout.
- The activist investor employed a strategy of greenmail to get the board's attention and provoke change.
- Greenmail attacks often caught companies off guard, with limited means to defend against such tactics.
- Critics argued the shareholder's attempt to acquire more shares was merely an attempt at greenmail.
- To thwart the greenmail attempt, the company quickly issued a large number of new shares to dilute the would-be buyer's stake.