Bon Voyage Bonus

DEFINITION of 'Bon Voyage Bonus'

Cash, securities or other assets paid to an individual or group for ceasing a particular activity. A bon voyage bonus is most often associated with hostile takeovers, with the target company paying the traider for not making further attempts to force a takeover for a specific period of time. It is often considered the payment to a greenmailer.

BREAKING DOWN 'Bon Voyage Bonus'

Paying a bon voyage bonus to a greenmailer is one of several tactics that a target company can employ to fend off a takeover, though it can be very costly. In order to cease a takeover bid, a corporate raider will most likely demand a premium over the current share price. Some companies may include an anti-greenmail provision in their charters, so as to prevent this sort of situation from arising.

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RELATED FAQS
  1. Under what circumstances might a company decide to do a hostile takeover?

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  3. How can a company buy back shares to fend off a hostile takeover?

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  4. What is the difference between an acquisition and a takeover?

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