by Dr.Pr0n June 25, 2009
Get the grenyarnia mug.(FINANCE) when a corporate raider initiates a hostile takeover of an undervalued corporation with the intent of forcing the management to buy him off.
HOW IT WORKS
A corporate raider engaged in greenmail requires a takeover vehicle to launch a hostile takeover. The takeover vehicle is usually another corporation controlled by the raider, although in recent years ESOPs have been used (e.g., Tribune Corp., 2007). The vehicle buys up a lot of shares of the target company's stock on the market, then announces it wants to acquire a controlling interest.
Management opposes the takeover bid. It can (a) challenge the legality of the takeover, (b) adopt a charter that makes it hard for the takeover vehicle to run the company it's proposing to buy (a poison pill), (c) seek another buyer that is more favorable (a white knight), or (d) borrow a ton of money and buy so many shares that the stock price goes up.
The raider makes a tender offer for the shares he doesn't own. If the target picks (c) or (d), then the raider will probably make a huge amount of money when he suddenly dumps all his shares on the market. His tender offer probably started a bidding war with management, driving share prices to something very high.
WHAT CAN GO WRONG
The management can use (a) or (b) successfully, or it can use (e), viz., launch a hostile takeover bid of the target vehicle. The raider can lose of lot of money if a lot of shareholders have accepted his tender offer.
HOW IT WORKS
A corporate raider engaged in greenmail requires a takeover vehicle to launch a hostile takeover. The takeover vehicle is usually another corporation controlled by the raider, although in recent years ESOPs have been used (e.g., Tribune Corp., 2007). The vehicle buys up a lot of shares of the target company's stock on the market, then announces it wants to acquire a controlling interest.
Management opposes the takeover bid. It can (a) challenge the legality of the takeover, (b) adopt a charter that makes it hard for the takeover vehicle to run the company it's proposing to buy (a poison pill), (c) seek another buyer that is more favorable (a white knight), or (d) borrow a ton of money and buy so many shares that the stock price goes up.
The raider makes a tender offer for the shares he doesn't own. If the target picks (c) or (d), then the raider will probably make a huge amount of money when he suddenly dumps all his shares on the market. His tender offer probably started a bidding war with management, driving share prices to something very high.
WHAT CAN GO WRONG
The management can use (a) or (b) successfully, or it can use (e), viz., launch a hostile takeover bid of the target vehicle. The raider can lose of lot of money if a lot of shareholders have accepted his tender offer.
The most successful greenmail practitioner was T. Boone Pickens, who used Mesa Petroleum (now Pioneer Oil) to greenmail six companies. Eventually he was ousted from his own company.
by Sorry, the good guys lost September 4, 2010
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when someone is fingering someone elses ass hole and inserts their entire fist and then spreads it out, causing the other person to feel like something exploded inside them like a hand grenade.
by Dale P. Johnson March 23, 2008
Get the helsinki hand grenade mug.When you're at a party and an ugly chick hits on your friend and you hit on her in order to save him.
by hugachick July 3, 2009
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by diatribe September 27, 2002
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by Bradboy January 10, 2007
Get the dive on the hand grenade mug.The act of flatulating in small inanimate object (usually a pillow or stuffed animal) for the purpose of delivering its putrid payload to the olfactory sensors of an unsuspecting bystander.
While Cliff was passed out on the sofa I lobbed an unholy hand grenade at his face. Hilarity ensued.
by JoNeBoY August 14, 2010
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