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greenmail


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The purchase of a large block of shares in a company, which are then sold back to the company at a premium over the market price in return for a promise not to launch a bid for the company. This practice is not uncommon in the USA, where companies are much freer than in the UK to buy their own shares. Although the morality of greenmail is dubious, it can be extremely profitable.

Subjects: Business and Management — Economics.


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