Fair game

Before diving into the exciting topic of takeover targets, a quick disclaimer. I’d never buy a stock solely because it might receive a takeover offer and, for the most part, I reckon that’s a good rule for all long-term investors to follow.

Yet there’s no denying that takeovers can get the blood up. As Wesfarmers’ recent bid for rare earths miner Lynas showed, such deals can garner plenty of media headlines. For investors, the rise in share price can bring forward years of capital gains and deliver handy near-term profits.

Then there’s the prospect of a bidding war, where two or more companies set their sights on the same target. This can lead to mouthwatering