Target Company

Target company

Often used in risk arbitrage. Firm chosen as an attractive takeover candidate by a potential acquirer. The acquirer may buy up to 5% of the target's stock without public disclosure, but it must report all transactions and supply other information to the SEC, the exchange the target company is listed on, and the target company itself once the 5% threshold is hit. See: Raider.

---

Takeover Target

A publicly-traded company that is the object of a takeover, especially, but not necessarily, a hostile takeover. That is, another company is interested in buying the takeover target, often by buying its shares with the intent of obtaining a majority stake without the authorization of its board of directors. An acquiring company identifies takeover targets based on a variety of factors, including share price and growth potential; it may buy up to 5% of the takeover target without publicly disclosing its intentions. A takeover target is also called a target company.

---

target company

A firm that is the object of a specific action unwanted by its management, such as a takeover attempt or an antitrust suit. Also called takeover target. Compare raider. See also in play, takeover, toehold purchase.