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takeover target definition in finance

takeover or acquisition the acquisition by one firm of another firm. A takeover, which merges two companies into one, can bring major operational advantages and improvements to performance and for shareholders. ConAgra responded by offering $94 per share, which was significantly higher than the $65 per share price Ralcorp was trading at when the takeover attempt began.

The acquirer may also be able to eliminate competition by going through a strategic takeover. The target firm’s management and board of directors may strongly resist takeover attempts by implementing tactics such as a The acquiring company may issue a tender offer or a public takeover bid—an open offer to buy shares from each shareholder of the target for a certain price at a certain time. By buying the target, the acquirer may feel there is long-term value. In the takeover process, the company making the bid is the acquirer while the company it wishes to take control of is called the target.

A takeover occurs when one company makes a bid to assume control of or acquire another, often by purchasing a majority stake in the target firm. takeover or acquisition the acquisition by one firm of another firm. When a company uses debt, it's known as a leveraged buyout. 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 poison put is a takeover defense strategy in which the target company issues a bond that investors can redeem before its maturity date. They can be voluntary, meaning they are the result of a mutual decision between the two companies. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. The debt is moved onto the balance sheet of the target company. When initial advances were rebuffed, ConAgra intended to work a hostile takeover. Takeovers can take many different forms. All cash deals is an offer that involves a certain amount of money by the bidding company for each share of the target company. The other option is to fund the takeover from its existing cash reserves, although this is a very unusual and rare source of funds. Some potential acquirers will take the next step of purchasing shares. Where they differ is that a merger involves two equal companies while a takeover generally involves unequals—a larger company that targets a smaller one. For companies listed on the STOCK MARKET this involves the acquiring firm either buying in the open market, or bidding for the voting SHARES in the target firm (See BID, TAKEOVER BID). An acquiring company may pursue an opportunistic takeover, where it believes the target is well priced. As the name suggests, a friendly takeover occurs when the target company is happy about the arrangement. This allows the acquirer to enter a new market without taking on any extra time, money, or risk.

Some companies may opt for a strategic takeover. Beyond outright takeover attempts, as has been the historical norm, shareholder activism is a modern twist on the definition of 'target firm.' A takeover target is also called a target company. A welcome or friendly takeover, such as an acquisition, generally goes smoothly because both companies consider it a positive situation. A takeover is virtually the same as an acquisition, except the term takeover has a negative connotation, indicating the target does not wish to be purchased.

… A poison pill is a defense tactic utilized by a target company to prevent, or discourage, attempts of a hostile takeover by an acquirer. In these cases, the management of the target company approves the transaction. They are similar to mergers in that both processes combine two companies into one. The offers that appear in this table are from partnerships from which Investopedia receives compensation. There are many reasons why companies may initiate a takeover. A company may act as a bidder by seeking to increase its In a takeover bid, the company that makes the offer is … A takeover bid is a corporate action in which an acquiring company makes an offer to the target company's shareholders to buy the target company's shares. It's not always easy to tell which companies are good takeover targets, but if a company is struggling, or if it has a large amount of cash on its balance sheet, it's likely that other companies consider the company as a takeover target.

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