Anti greenmail provision

The anti-greenmail provision is a provision in the US securities laws that prohibits a company from paying a shareholder to withdraw a tender offer or other proposal to acquire control of the company. The provision is designed to prevent "greenmail," which is the practice of a company paying a shareholder to withdraw a tender offer or other proposal to acquire control of the company, thereby preventing a change in control of the company.

The anti-greenmail provision is typically found in the company's bylaws or charter and is intended to protect the interests of all shareholders by preventing a company from paying a shareholder to withdraw a tender offer or other proposal to acquire control of the company. The provision is often triggered when a shareholder makes a tender offer or other proposal to acquire control of the company and the company pays the shareholder to withdraw the offer or proposal.

The anti-greenmail provision is designed to prevent a company from using its funds to pay a shareholder to withdraw a tender offer or other proposal to acquire control of the company, thereby preventing a change in control of the company. The provision is intended to protect the interests of all shareholders by ensuring that the company is not used as a means of enriching a single shareholder at the expense of other shareholders.

Examples of anti-greenmail provisions include:

1. A provision that prohibits the company from paying a shareholder to withdraw a tender offer or other proposal to acquire control of the company.
2. A provision that requires the company to obtain the approval of a majority of its shareholders before paying a shareholder to withdraw a tender offer or other proposal to acquire control of the company.
3. A provision that prohibits the company from using its funds to pay a shareholder to withdraw a tender offer or other proposal to acquire control of the company.

The anti-greenmail provision is an important tool for protecting the interests of all shareholders and ensuring that the company is not used as a means of enriching a single shareholder at the expense of other shareholders.