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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (1821)5/15/2000 10:33:00 AM
From: FiloF  Respond to of 1989
 
Hi. Textbook definition is:

A premium paid to a raider to get him/her to terminate a takeover attempt.



To: Ausdauer who wrote (1821)5/15/2000 10:35:00 AM
From: Sam  Read Replies (1) | Respond to of 1989
 
OT---greenmail
Aus,
"Greenmail" is a term coined and made popular in the early 80s when the general market was much, much lower than today, and so called "value" stocks abounded. People like Ichan and Boone Pickens would take large positions in cash-rich companies, and would then threaten a take-over from entrenched managements that were not, they said, managing the companies for stockholders but for themselves. The managements of these companies would then buy back the block of shares from the "greenmailer" for a large sum of money, usually above the prevailing market value of the company and always well above the price paid by the raider who would then go away and find a new target. Frequently, other shareholders could not sell their shares for the same price that the raider was paid.

You can connect the dots for yourself on Icahn buying Seagate stock. Selling Sandisk stock raises some extra cash for Seagate's current management to, shall we politely say, "placate" Mr. Icahn, if that is what he is interested in.

Regards,
Sam



To: Ausdauer who wrote (1821)5/15/2000 10:37:00 AM
From: Yogi - Paul  Read Replies (1) | Respond to of 1989
 
Ausdauer,
A good case study of greenmail including IRS implications: triadbusiness.com

Paul



To: Ausdauer who wrote (1821)5/15/2000 10:38:00 AM
From: Robert Douglas  Respond to of 1989
 
Re: Greenmail.

As I understand it, the term greenmail is usually applied to an "investor" who takes a position in a company with the threat of taking it over but will "go away" if he is paid off by the company.

[edit] I see that 3 other people have answered in the time it took me to write this.


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