Anti-Greenmail Provision

AAA

DEFINITION of 'Anti-Greenmail Provision'

A special clause located within a firm's corporate charter that acts as a deterrence against the board of directors passing a share buyback.

INVESTOPEDIA EXPLAINS 'Anti-Greenmail Provision'

This provision acts as a preventative measure, restraining managers from buying back company stock at significant premiums due to greenmail. A majority shareholder may be able to influence the board into purchasing shares at a significant premium, so the anti-greenmail provision requires that a majority of shareholders (excluding the majority shareholder) agree to the buyback.

RELATED TERMS
  1. All-Holders Rule

    An SEC regulation that requires a tender offer to be made available ...
  2. Bankmail

    An agreement made between a company planning a takeover and a ...
  3. Whitemail

    A strategy that a takeover target uses to try and thwart an undesired ...
  4. Anti-Takeover Measure

    Measures taken on a continual or sporadic basis by a firm's management ...
  5. Best-Price Rule - Rule 14D-10

    An SEC regulation that stipulates that a tender offer is open ...
  6. Greenmail

    An antitakeover measure that arises when a large block of stock ...
Related Articles
  1. Evaluating The Board Of Directors
    Insurance

    Evaluating The Board Of Directors

  2. Analyzing A Bank's Financial Statements
    Fundamental Analysis

    Analyzing A Bank's Financial Statements

  3. The Basics Of Corporate Structure
    Investing Basics

    The Basics Of Corporate Structure

  4. A Breakdown Of Stock Buybacks
    Investing

    A Breakdown Of Stock Buybacks

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center