GREENMAIL NOUN (BUSINESS WORLD)

In financial jargon, the practice of buying up enough stock in a company to threaten a hostile take-over, thereby forcing the company's management to buy the shares back at an inflated price if they are to retain control of the business. Etymology: Formed by substituting green for the black of blackmail; unlike blackmail, greenmail remains within the law, and it is backed by dollars ('greens'). This is not the first such alteration of the word blackmail: in the seventies there were a number of court cases in the US in which the defence threatened to expose government secrets unless charges were dropped, and these became known as greymail (or, in the US, graymail) cases. History and Usage: Greenmail was one of many financial manoeuvres surrounding take-over bids that developed, principally in the US, during the first half of the eighties. In the UK the practice was limited by the Takeover Panel. By the middle of the decade the word had also started to be used as a verb, and an agent noun greenmailer had been derived from this. It has been claimed that, when the deal is worth more than a certain sum of money, it becomes known as goldmail. She went into hostile corporate takeovers, the money being made...in greenmail and arbitrage. Saul Bellow More Die of Heartbreak (1987), p. 79 His clients were little-known 'wanna-be' raiders, third-tier greenmailers such as...Herbert Haft, the pompadoured scourge of the retail industry. Bryan Burrough & John Helyar Barbarians at the Gate (1990), p. 157