Sleeping Beauty

DEFINITION of 'Sleeping Beauty'

A company that is considered prime for takeover, but has not yet been approached by an acquiring company. A company may be considered a sleeping beauty for a variety of reasons, including large cash reserves, undervalued real estate, undervalued share price, attractive assets or strong growth and earnings potential. A takeover, or acquisition, is typically characterized by the purchase of a smaller company by a larger firm. The acquiring company generally offers a cash price per share, thereby purchasing the target outright for its own shareholders.

BREAKING DOWN 'Sleeping Beauty'

In relation to mergers and acquisitions (M&A), a sleeping beauty is a company that is "sleeping;" that is, one that is ripe for takeover to achieve its full potential. A sleeping beauty might be a new company that has great potential but has not yet been noticed, or it could be an established company that has not been managed well, and is therefore not maximizing its potential. A sleeping beauty essentially lies in wait until a takeover occurs, at which point the company theoretically would be able to live up to its potential.

RELATED TERMS
  1. Takeover

    A corporate action where an acquiring company makes a bid for ...
  2. Eat Well, Sleep Well

    An adage that, referring to the risk/return trade-off, says that ...
  3. Busted Takeover

    A highly leveraged corporate buyout that is contingent upon the ...
  4. Takeover Bid

    A type of corporate action in which an acquiring company makes ...
  5. "Just Say No" Defense

    A strategy used by corporations to discourage hostile takeovers ...
  6. Whitemail

    A strategy that a takeover target uses to try and thwart an undesired ...
Related Articles
  1. Trading

    Pinpoint Takeovers First

    Use these seven steps to discover a takeover before the rest of the market catches on.
  2. Investing

    What is a Takeover?

    A takeover happens when one company makes a bid to acquire a target company.
  3. Investing

    Warding Off Hostile Takeovers

    The purpose of this article is to provide a general overview of hostile corporate takeovers, while highlighting a general course of action against such activity. This article provides basic information ...
  4. Markets

    Trademarks Of A Takeover Target

    These tips can lead you to little companies with big prospects.
  5. Investing

    Reverse Takeover

    Learn more about this type of takeover and how companies use it to avoid IPOs.
  6. Investing

    Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.
  7. Insights

    Fitbit Wants to Improve Your Sleep Habits (FIT)

    Fitbit has released an update to their Fitbit app that will help users establish better sleep routines.
  8. Investing

    How To Profit From Mergers And Acquisitions Through Arbitrage

    Making a windfall from a stock that attracts a takeover bid is an alluring proposition. But be warned – benefiting from m&a is easier said than done.
  9. ETFs & Mutual Funds

    Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
  10. Investing

    What Investors Can Learn From M&A Payment Methods

    How a company pays in a merger or acquisition can reveal a lot about the buyer and seller. We tell you what to look for.
RELATED FAQS
  1. What is the difference between an acquisition and a takeover?

    There is no tangible difference between an acquisition and a takeover; both words can be used interchangeably - the only ... Read Answer >>
  2. Under what circumstances might a company decide to do a hostile takeover?

    Learn about why companies use a hostile takeover to gain control of another company, and understand the different methods ... Read Answer >>
  3. What happens to the stock prices of two companies involved in an acquisition?

    When a firm acquires another entity, there usually is a predictable short-term effect on the stock price of both companies. ... Read Answer >>
  4. How can a company buy back shares to fend off a hostile takeover?

    Learn about why a business might use a stock buyback to thwart a hostile takeover attempt by reducing its total assets and ... Read Answer >>
  5. What's the difference between a merger and a hostile takeover?

    Understand the difference between a merger and a hostile takeover, including the different ways one company can acquire another, ... Read Answer >>
  6. What is the difference between a merger and a takeover?

    In a general sense, mergers and takeovers (or acquisitions) are very similar corporate actions - they combine two previously ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center