GREENMAIL

A financial term that is derived from blackmail with the “green” referring to U.S currency. It is an act of corporate raiders intending to generate large amounts of money by threatening a hostile takeover. By way of example, an investment fund buys stock in a target company threatening to take over the company. Instead of completing the takeover, the fund offers to sell the stock purchased back to the company, shareholders or directors at a substantially higher price than was paid.