greenmail

American  

[green-meyl] / ˈgrinˌmeɪl /

noun

Stock Exchange.

1. the practice of buying a large block of a company's stock in order to force a rise in stock prices or an offer by the company to repurchase that block of stock at an inflated price to thwart a possible takeover bid.

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greenmail British  

/ ˈɡriːnˌmeɪl /

noun

1. (esp in the US) the practice of a company buying sufficient shares in another company to threaten takeover and making a quick profit as a result of the threatened company buying back its shares at a higher price

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Other Word Forms

• greenmailer noun

Etymology

Origin of greenmail

green (in sense “money”) + (black)mail

Example Sentences

Fiss said that companies often try to make corporate raiders go away quietly by paying a premium for the shares they acquired, a practice known as greenmail.

From Los Angeles Times

Critics called this stratagem “greenmail” and condemned it for ignoring the interests of employees, customers and management.

From Washington Post

In 1987, the Internal Revenue Service introduced a tax of 50% on profits from greenmail, and several states passed laws making it hard for companies to buy back stakes from short-term investors at a premium.

From The Wall Street Journal

In the 1980s, he pioneered “greenmail” raids in which financiers threatened companies with hostile takeovers unless they were paid a premium to go away.

From Washington Post

Some say the tactics activists are now taking to sell back their shares represent a departure from the so-called greenmail of the 1980s, when boards paid hostile investors to exit their companies.

From Reuters