what is greenmail
A corporation's attempt to stop a takeover bid by paying a price above market value for stock held by the aggressor. Greenmail is a practice in corporate Mergers and Acquisitions. Like blackmail, the concept after which it is named, greenmail is money paid to an aggressor to stop an act of aggression. In the case of greenmail, the aggressor is an investor attempting to take over a corporation by buying up a majority of its stock, and the money is paid to stop the takeover. The corporation under attack pays an inflated price to buy stock from the aggressor, known popularly as a corporate raider.