noun
General Slang
Greenmail
· noun · finance
Buy a big stake, threaten a takeover, then sell it back to the target at a premium.
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Definitions
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A corporate raider tactic: accumulate a threatening block of a company's shares, rattle the board with the prospect of a hostile takeover, then agree to go away in exchange for the company buying the stake back at a fat premium. The target's other shareholders get diluted while the raider walks off with a quick payday. Heyday was the 1980s; later largely killed off by tax and securities reforms.
“Sir James Goldsmith made a small fortune in greenmail before the rules tightened up.”
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Greenmail In A Sentence
Sir James Goldsmith made a small fortune in greenmail before the rules tightened up.
Origin & Usage
Portmanteau of 'greenback' (US dollar) and 'blackmail', coined in the 1980s during the wave of US hostile takeover battles.
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