Target Firm

A firm that has been targeted by another firm for a takeover.

Investopedia Says:
Companies are targeted for a number of reasons. A firm may be attractive because it possesses large cash reserves, undervalued real estate or otherwise huge potential.

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Firm that has been chosen as attractive for Takeover 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 Securities and Exchange Commission, the exchange the target company is listed on, and the target company itself once 5% or more of the stock is acquired. See also Toehold Purchase; Schedule 13d; Sleeping Beauty; Tender Offer; Williams Act.