Aether Holdings Inc. (NDAQ:AETH) has decided to switch businesses yet again. For those who don't remember, Aether started out in the wireless business back before the dotcom boom. After reducing its workforce by over 99% and watching its stock price move from mover $300 to under $3, the company decided to get into the mortgage securities business. Now, in a recent 8-k filing with the SEC, they announced they were changing businesses yet again - this time to the footwear business (through their NexCen Brands subsidiary). According to the filing:

"On August 21, 2006, Aether Holdings, Inc., a Delaware corporation (the “Company”), NexCen Franchise Brands, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“NexCen Brands”), and NexCen Franchise Management, Inc., a Delaware corporation and wholly owned subsidiary of NexCen Brands (“NexCen Management,” and together with NexCen Brands, the “Purchasers”), entered into an Equity Interest and Purchase Agreement (the “Purchase Agreement”) with Athlete’s Foot Marketing Associates, LLC (“Seller”), Athlete’s Foot Brands, LLC (“Brands”), The Athlete’s Foot Marketing Support Fund, LLC (“Support Fund,” and together with Brands, the “AFB Companies”), Robert J. Corliss (“Corliss”), Donald Camacho (“Camacho”), Timothy Brannon (“Brannon”) and Martin Amschler (“Amschler,” and together with Corliss, Camacho and Brannon, the “Shareholders”)."

They also announced their exit from the mortgage securities business with the sale of their remaining assets:

"Exit from Mortgage-Backed Securities Business:

At the same time as it approved the Acquisition, the Company’s Board of Directors (the “Board”), taking into account a range of business, strategic and financial considerations, decided that it was in the best interests of the Company and its stockholders for the Company to sell its remaining MBS investments for the purposes of exiting the MBS business and allocating those assets to support the growth and development of Aether’s IP business. The decision to exit the MBS business and focus on the IP business is not conditioned upon the completion of the Acquisition and, in light of the Company’s intention to finance a portion of the Acquisition purchase price with third-party debt, the Company expects to complete the Acquisition without needing to liquidate any of its MBS investments.

Because the reallocation of the Company’s MBS resources to the IP business may be considered a 'sale of all or substantially all' of the Company’s assets under Section 271 of the Delaware General Corporation Law, the Company will seek stockholder approval at its 2006 annual meeting to effect this reallocation of its assets. The Company expects to file a proxy statement for the annual meeting with the Securities and Exchange Commission within the next two weeks and anticipates that the annual meeting will be held early in the fourth quarter."

The company's new business plan is to convert all the stores it acquires into franchises and then maximize their value by building their brand. So why should we be concerned with such an unfocused company with a long history of losses that is currently struggling with it's second turnaround attempt? Well, because of the long history of losses (and its bank account)! In the tax world, there is something known as a "net operating loss carryforward" (NOLs), which enables companies to deduct their past losses against future earnings. This will give Aether a big break as it works to turnaround the company in a new market. Moreover, the company also has about $2/share in cash! This will help the company with funding acquisitions and paying off long-term debt. All things considered, the company has a dirty past and a long road ahead of it, but management has a lot of leftover "benefits" available to them to effectively capitalize on their new strategy. Whether or not they are able to do so remains to be seen; however, the stock definitely warrants keeping an eye on!

Intermagnetics General Corporation (NDAQ:IMGC) announced yesterday in a 14A filing with the SEC that they plan on moving forward with their merger plans with Royal Philips through their subsidiary Philips Holding (NYSE:PHG). This merger, which was originally announced on June 15th, had been the subject of two outstanding shareholder lawsuits that sought to prevent the merger. The lawsuits alleged that the company had "breached their fiduciary duties by failing to publicly announce an open bidding process or otherwise seek additional officers to acquire Intermagnetics, and by failing to provide full disclosure to certain material financial information." In their filing, the company noted that these lawsuits had been resolved, but gave no details. Shareholders who are on record as of August 16th will be able to vote on the proposed merger on September 26th.

Their proxy statement outlined the details of the transaction:

"If our stockholders adopt the merger agreement and the merger is subsequently completed, you will be entitled to receive $27.50 in cash, without interest, for each share of Intermagnetics common stock you own, unless you have properly exercised your appraisal rights. On June 14, 2006, the last full trading day prior to the public announcement of the merger agreement, the closing price of our common stock was $21.38 per share."

The lawsuits may have had some merit. The buyout premium in this case is only 28% - at a price less than a recent 52 week high made by the company. Why wasn't a bidding process announced so other suitors could potentially offer a greater amount to current shareholders? The board of directors, who approved this plan, are supposed to always act in the best interest of shareholders...

With these lawsuits settled, the company only needs a proxy vote and approval from the EU before moving forward. With a 70% institutional ownership stake, it is likely that the merger will move ahead as planned.

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Activist hedge fund Pirate Capital announced its final slate of nominees for the Cutter & Buck, Inc. (NDAQ:CBUK) board of directors today in their ammended 13D filing with the SEC. According to the filing:

"On August 18, 2006, pursuant to discussions between representatives of the Issuer and representatives of the Reporting Persons, the Issuer notified the Reporting Persons of its decision to include David A. Lorber, a Director and Senior Investment Analyst at Pirate Capital, amongst the Issuer's eight nominees for election as directors at the Issuer's 2006 annual meeting of shareholders (the "Annual Meeting"). Concurrently, the Issuer also notified the Reporting Persons of its decision to include Thomas O'Riordan, an industry expert recommended to it by the Reporting Persons and considered by the Governance Committee of the Issuer, amongst the Issuer's eight nominees for election as directors at the Annual Meeting. Mr. O'Riordan is a consultant to the footwear, apparel and sporting goods industries and was recently a senior executive and director with Fila. Mr O'Riordan is also a member of the Board of Directors of Innovo Group, a publicly traded apparel company."

Pirate also revealed a 13.5% stake in the company, amassed since December 10, 2004, when it first announced it's ownership in the stock. After buying at the top and watching the stock sink from the mid-14s to it's current level below $10, the fund is now ready to step in and unlock shareholder value. Although it may be a long-term play, Pirate Capital has a very skilled management team and a high rate of success when it comes to unlocking shareholder value through turnarounds or liquidations. Given their likely averaged price, you can be sure that they are looking for a significant premium to the current price. CBUK is definitely a good stock to keep an eye on when it comes closer to the board's election at the upcoming shareholder's meeting.

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