Whitemail

Whitemail is a way that a firm can avoid a takeover with the help of a friend(ly firm). Basically, the firm that’s avoiding a takeover will sell discounted shares to their friend-firm. Then, if someone tries to take over their firm, the firm can just shrug their shoulders and say “well, our friend-firm has x shares, so you’ll have to talk it out with them.” See: Hostile Takeover.

The friend-firm that has the shares can make the takeover difficult by only offering to sell the shares at super-high prices, making it not-worth-it for the want-to-take-over firm. Whitemail is a great strategy for discouraging takeover...if you have a friend. So...keep your friends close.