Greenmail refers to the amount
A financial term!
Greenmail refers to the amount of money that a corporate raider or activist investor demands from a company in exchange for withdrawing their takeover bid or proxy fight. In other words, it's the "ransom" paid to the raider to prevent a hostile takeover or to settle a proxy fight.
The term "greenmail" was coined because the money paid to the raider is often referred to as "green" or "black" money, implying that it's a form of bribery or extortion. The practice of greenmailing is considered unethical by some, as it can be seen as a form of blackmail or coercion.
Greenmailing can take many forms, including:
- A raider demands a significant payment from the company to withdraw their takeover bid.
- An activist investor demands a seat on the company's board or other concessions in exchange for not launching a proxy fight.
- A company pays a raider to settle a proxy fight or to prevent a hostile takeover.
Greenmailing is often criticized because it can lead to the misuse of corporate funds and can undermine the interests of the company's shareholders. However, some argue that it can also be a legitimate way for companies to avoid costly and distracting proxy fights or takeovers.