Greenmail is an offer by a company,threatened by takeover,to offer its stock at a reduced price to a third party.

Question

Quizplus · Accepted Answer

Greenmail is an effort by the target firm to prevent an impending takeover. When a hostile firm buys a large block of outstanding target company stock and the target company management feels that a tender offer is impending, they offer to buy the stock back from the hostile company at a higher price than the unfriendly company paid for it.

Greenmail Is an Offer by a Company,threatened by Takeover,to Offer