A target company is a company that is the subject of an attempted acquisition by a potential buyer. Generally speaking, the acquisition will result in a change of control of the target company. Ownership will transfer to the acquiring company, with the acquiring company (also referred to as the 'acquirer') being the surviving corporate entity.
Divestopedia Explains Target Company
In the case of a private company, the acquisition of a target company will be negotiated between its shareholders and the buyer (acquirer), with the acquirer typically purchasing all of the assets or shares of the target company.
When the target is a public company, acquisitions are usually facilitated through a takeover bid (i.e., the purchase of shares held by public investors) or by way of a merger (which would be subject to an approval vote by shareholders). In the case of a public target company, the acquisition may be supported by the target company's board of directors and management (referred to as a 'friendly takeover' or 'friendly merger') which would then recommend that shareholders accept the takeover bid or approve the merger.
In situations where the target company's board of directors and management oppose the acquisition, referred to as a hostile takeover, the target company may undertake various actions to prevent the takeover or to extract a higher acquisition price, either from the original bidder or from another party.