Filing Flows › Target (TGT) › Takeover & LBO
Is Target (TGT) a takeover target?
A leveraged buyout at today's price plus 30% ($205.33 a share) would return a loss of about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $120.78 a share (−24% against today's $157.95). At $98.1B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 1.9% of companies with its figures were bought within a year (0.38× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $205.33 | today's $157.95 plus 30% |
| × shares | 456.6 million | |
| = Equity value | $93.8B | |
| + Debt refinanced | $14.4B | |
| − Cash | $10.0B | |
| = Enterprise value | $98.1B | 10.7× EBITDA of $9.2B |
| Fees | $2.0B | 2% of the price |
| New debt | $50.6B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $49.5B | 49% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $109.8B | $9.4B | $3.9B | $437M | $50.1B |
| Year 2 | $112.2B | $9.6B | $3.8B | $511M | $49.6B |
| Year 3 | $115.0B | $9.8B | $3.8B | $599M | $49.0B |
| Year 4 | $118.2B | $10.1B | $3.8B | $702M | $48.3B |
| Year 5 | $121.7B | $10.4B | $3.7B | $823M | $47.5B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 8.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $86.4B | |
| − Debt left | $47.5B | |
| = Buyer's equity | $38.9B | |
| Money multiple | 0.79× | on $49.5B put in |
| Buyer's yearly return (IRR) | −4.7% |
Price against return
What the buyer makes at other premiums over today's $157.95; the IRR reaches 20% at $120.78 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $173.75 | 2.3% |
| 20% | $189.54 | −1.6% |
| 30% | $205.33 | −4.7% |
| 40% | $221.13 | −7.3% |
| 50% | $236.92 | −9.5% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $107.7B | |
| EBITDA, last 12 months | $9.2B | 8.5% of revenue |
| Depreciation and amortization | $3.2B | |
| Capital spending | $4.3B | |
| Debt | $14.4B | |
| Cash | $10.0B | |
| Share price | $157.95 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 2.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 22% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Target would cost about $209.28 a share, $95.6B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $189.54 | $86.5B |
| Median | 32.5% | $209.28 | $95.6B |
| High end (a quarter paid more) | 51.8% | $239.77 | $109.5B |
The odds, from history
Historically 1.9% of companies with its figures were bought within a year (0.38× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Target's latest quarter
Target, Q2 FY27: revenue $26.5B (+5% year over year), operating margin 9.6%, net earnings $1.9B, operating cash flow $3.8B. The chart follows the revenue to costs, profit and cash.
Questions
Is Target being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Target?
A leveraged buyout at today's price plus 30% ($205.33 a share) would return a loss of about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $120.78 a share (−24% against today's $157.95). At $98.1B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Target cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Target would cost about $209.28 a share, $95.6B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.