Regular readers of our blog may remember Sizeler Property Investors, Inc. (NYSE:SIZ), which we covered back on September 7th, when the company received a letter from Opportunity Investors questioning why they weren't reviewing competitive bids. Well, Sizeler announced yesterday in an 8K filing with the SEC yesterday that it finally would consider the rival bid from Compson.

The company also revealed more details about the bid: It turns out that the bid is structured as an asset purchase, rather than a bid for the company as a whole. This means that the $16.10 per share would be paid for the real estate holdings of Sizeler; however, other company assets and liabilities would remain. The company said that the actual value to shareholders would be less than $16.10 per share; however, they are still currently working to review the bid.

Interestingly, about 10 minutes later, Revenue Properties Co. (with whom the company has the merger agreement at $15.50 per share) filed a 13D/A pointing out the flaws in the Compson bid:

"Among other relevant aspects of the Proposal, we would note the following: (1) the Proposal is non-binding and subject to negotiation of definitive documentation, (2) the Proposal relates to a purchase of assets only (and not a purchase of the public entity) and, as such, (i) Sizeler (and indirectly its stockholders) would continue to be responsible for significant wind-up costs, (ii) the actual receipt of consideration by Sizeler's stockholders would necessarily be subject to increased risk and delay, and (iii) Sizeler's stockholders would, we understand, be liable as transferees under State law for any liabilities of Sizeler that are not assumed or paid off by the purchaser under the Proposal, (3) while the Proposal refers to debt financing, a commitment letter was not included with the Proposal, (4) the Proposal appears to suggest that only $20 million of equity would be available for the transaction, (5) the Proposal calls for a break-up fee of $12 million, (6) the Proposal includes additional closing conditions relating to asset conveyances and estoppel certificates, and (7) while the Proposal does not seem to contemplate a "diligence out" in the definitive documentation, there appears to be an information review process
built into the Proposal."

The final valuation on the deal have yet to be determined by the company's analysts; however, the door is still open for a more competitive bid from either side. It is possible that Opportunity Investors and other majority holders may also want to review the proposal before siding with either offer. Currently investors are remaining prudent with shares sitting around $15.34 - up 2% since our first mention of the stock.

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Acadia Reality Trust (AKR)
Robert's Reality Investors (RPI)
Colonial Property Trust (CLP)

We posted Goldman Sachs Group, Inc. (NYSE:GS) earnings announcement on September 12th, which was released a few days before other companies in its industry (investment banking/brokerage). Days later, most of the other brokerages that announced similar results that caused their stocks to move up on the news. Despite how obvious this concept may seem, many investors do not realize this correlation between companies within the same industry. Note the chart below, which illustrates Goldman Sachs (GS), Morgan Stanley (MS), and Lehman Brothers (LEH) - the three major players in the investment banking/brokerage industry:

Notice the strong correlation between the three companies - especially the jumps in price after the earnings announcements. Depending on the market, many large companies announce earnings similar to their peers. Therefore, if an early-reporting company beats analysts with strong earnings, it is worth the time to check out other companies in the industry. This is especially true if the operating results note a strong "macro environment" helping their growth as opposed to internal changes.

You can find companies in the same industry by visiting Google Finance, and you can find their 8k and 10k filings at SECFilings.

Lone Star Steakhouse & Saloon Inc. (NDAQ:STAR) recently passed the U.S. antitrust milestone, but may face another roadblock after new information surfaced today that may put its proposed buyout at risk. In a 13D filing with the SEC, the company disclosed that Deutsche Bank had upped its stake to 9.8%. Moreover, the bank noted in its filing that it "decide to vote against the transactions contemplated by the Merger Agreement and may seek appraisal of the fair value of its shares". This filing comes shortly after activist hedge fund Barington Capital noted (in its 13D filing) that "based on its analysis to date, it believes that the transaction consideration fails to provide adequate value to the Company’s stockholders". Barington also notes (in an attached press release) that their opinion is also shared by other experts:

"The transaction, which is subject to stockholder approval, would only provide stockholders with a 15% premium to the closing price of Lone Star's stock on August 17, 2006, the day before the deal was announced. Barington notes that Lone Star's stock has traded higher than the transaction price less than three months prior to the date the deal was announced. Barington also notes that CL King & Associates' analyst Michael Gallo has reported that the $27.10 share price looks low in their view and that Oppenheimer & Co. analyst Michael Smith currently rates Lone Star a buy with a 12-month price target of $32 a share. Based on Barington's evaluation of the transaction thus far, Barington does not believe that the consideration adequately reflects the value of the Company's extensive real estate holdings and upscale Sullivan's and Del Frisco's restaurant brands."

Combined, these two shareholders own 19.2% of the company's outstanding shares. With so much uncertainty surrounding the situation, the company may face a tough proxy vote in the fourth quarter of this year (to be announced before Oct. 15th). Meanwhile, the CEO of the company revealed in an August 28th filing that his stock and options would enable him to make roughly $80 million after the transaction. With 1,178,639 options at $12.41 per share, the CEO has a strong interest in making this transaction go through. If the merger fails, the CEO's risk-free options money will have to be exercised - costing him over $14 million while taking the additional risk of the company underperforming in the future. Whether or not the vote goes through remains to be seen, but with the stock currently trading above the buyout price, some investors are banking that new bidders will surface or the company will be saved by Barington and company. This stock is definitely worth keeping on the radar as this situation unfolds.

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Brinker International, Inc. (EAT)
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