Greenmail

A corporate defense tactic from the 1980s takeover era in which a company buys back its own shares at a premium from a hostile acquirer to prevent a takeover. The term is a play on "blackmail" combined with "greenback." Corporate raiders like Carl Icahn and T. Boone Pickens were notorious for accumulating stakes in companies and then profiting from greenmail payments. SEC rules adopted in 1987 imposed a tax penalty on greenmail profits, making the practice far less common today.