When a company's board and management try to resist a buyer's overtures -- like the way the Fujisankei Communications Group is resisting Livedoor Co. -- colorful merger and acquisition terms come up. Here are some terms being used in connection with the Fuji TV-Livedoor saga.
Greenmail -- A play on blackmail, greenmail is sent when an unfriendly bidder buys a large block of stock and then demands the target company buy back the stock at a higher price if it does not want to be taken over. A greenmailer usually has no plan for an actual takeover, and only wants to make money. Greenmail is also called a "goodbye kiss" or a "bon voyage bonus."
Pac Man -- A target firm turns around and tries to take over the company that made the hostile bid.
Poison pill -- A target company tries to make its own stock less attractive to the buyer, usually by issuing a huge number of new shares to existing shareholders at a low price to dilute the voting rights of the bidder and make a takeover more difficult and expensive.
Scorched earth policy -- A firm sells off its valuable and desired assets -- called "crown jewels" -- or assumes liabilities to make a takeover unattractive. If taken too far, this tactic can destroy the company.
White knight -- A white knight is a company that saves the day by making a friendly takeover offer to a company threatened by a hostile one from a "black knight."
Lady Macbeth strategy -- A company poses as a white knight to gain trust, but then joins an unfriendly bidder. Named after the character in Shakespeare's "Macbeth" who acts noble and virtuous as a way to take advantage of others. (M.N.)