This chapter examines the issues surrounding one of the most important events to affect companies listed on a stock exchange and investors: a takeover or merger bid. It explores the opportunities for profits and losses for both companies and investors. The chapter offers scope for profit by investors, and discusses the prediction of takeovers and mergers. It follows that the market for corporate control needs to work efficiently and that there are no unnecessary obstacles to merger activity. In the case of an investor who buys shares in a company they think may be taken over, they do not lose their stake. The shares simply do not rise in price as was expected. The likelihood of acquisition decreases with increased size mainly because of the size-related transaction costs. The cut-off is the probability point above which a company may be classified as a likely takeover target.