ImClone Systems Incorporated (NDAQ:IMCL) has been embroiled in a battle with activist investor Carl Ichan for some time now, and things just keep heating up. The drama reached a new high today after the company released an interesting bit of information about Mr. Icahn:

"Mr. Icahn fails to tell you that only a few weeks ago he asked the Board to waive Section 203 of the Delaware General Corporation Law, which would have facilitated him buying more than 15% of the Company’s common stock without first making a tender offer to all stockholders.  He fails to tell you that the directors he now seeks to remove refused to grant him this waiver.

Mr. Icahn also fails to tell you that when a proposed acquirer told the Company a few weeks ago that it would be prepared to make an offer to acquire the Company for $36 per share in stock if Mr. Icahn would support it, he refused.

Mr. Icahn says he wants the Board to find a permanent Chief Executive Officer, but fails to tell you that he, one of his employees and one of the directors he proposes remain on the Board already constitute three of the six members of the committee tasked to find the new Chief Executive Officer.

By a majority vote, your Board determined that, although control of the Board may be in the best interests of Mr. Icahn and his affiliates, it would not be in the best interests of all stockholders.

We urge you to reject this maneuver by Mr. Icahn, who owns less than 15% of the outstanding stock, to remove six members of your Board and take over effective control of your Company and its future.  The directors Mr. Icahn seeks to remove have extensive experience and knowledge of the Company and the biotechnology industry—knowledge that would be lost if Mr. Icahn is successful.  Your Board is committed to acting in your best interests and believes that a balanced Board is better positioned than one dominated by Mr. Icahn to maximize long-term value for all stockholders." (Read Entire Letter)

Carl Icahn responded nine hours later with a convincing message to shareholders:

"1. ImClone filed a statement  today with the Securities and Exchange  Commission intimating that it turned down a bid of $35.50 for the Company as a result of my opposing it. This is in contradiction  to the Company's  statement of August 10, 2006,  indicating  that it turned  down the bid  because it was  inadequate.  It should be noted that the bid was a conditional  non-cash offer and made with the bidder's stock, which I believed was overpriced. Either the ImClone Board is now attempting to totally  mislead you or they are admitting  that they did not even have the strength of  conviction  to support a sale they believed in when an 11% stockholder  was  against  it. Are they now saying  that they wanted to sell the Company  (whose stock price had peaked at $86 per share in July 2004) for $35.50 in a non-cash transaction?  While I admit I was opposed to the bid, if the Board really  wanted to sell the  Company  at  $35.50,  it  should  have done what any self-respecting  board would have done.  They should have  accepted  the bid and then tried to convince the  stockholders  that the transaction was in their best interest and not let an 11% stockholder stand in their way.

This whole episode  points out that the Board is either unable to make decisions even if they believe  them to be in the best  interests  of  stockholders  or is currently misstating the facts solely to entrench themselves and keep themselves from being removed.

2. I  believe  that  ImClone  is  worth  more  than  $36 a share if it is run by competent people,  including  competent  high-level  management  supervised by a competent Board of Directors.  I believe in its product and its pipeline,  and I believe its other  stockholders  share that belief.  On September 14, 2006,  the Company's  investment banker called and said that the same bidder was interested in making the same  all-stock  bid at $36 with the same  conditions,  if I would favor it. I felt then that I was being  asked to comment on a non-bid but stated that if the all-stock bid were made, I still thought that the  consideration was inadequate and would vote my shares against it. In fact, no one from the Company even  contacted me to tell me that they changed their mind on the basis that the new suggested price was 50 cents higher,  nor did anyone from ImClone urge me to support the $36 possible  bid.  Had the Board really  favored a sale at $36, the Board  could  have  pursued  the  matter  and asked the  bidder to make the bid. However, I must admit I am very glad they did not." (Read Entire Letter)

Some investors are convinced that the Board is attempting a last ditch effort to save their jobs, while others contend that Carl Icahn is simply a smooth talker with a vendetta against the company. But we won't have to wait too long to find out, as the consent cards are already en-route to shareholders.

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Apple Computer, Inc. (NDAQ:AAPL)
8K Filing by the Company
Apple announced today in an 8K filing with the SEC that they had concluded their options probe. The company found that there was no misconduct by any member of Apple's current management team; however, serious concerns were raised about two former officers. The company is reporting these results to the SEC, while issuing a formal apology to shareholders.

Joy Global Inc. (NDAQ:JOYG)
Form 4 Filing by CFO
Joy Global CFO, Donald Roof, revealed today that he had recently purchased 10,000 shares of the company's stock, valued at around $330,000. This news comes shortly after the company's CEO said that commodity prices could fall significantly (10-30%) without their customers slowing down their mining (JOGY creates and sells mining equipment). The stock was up 1% today on the news.

WorldGate Communications, Inc. (NDAQ:WGAT)
13D/A Filing by Antonio Tomasello
Antonio Tomasello revealed today in a 13D/A filing with the SEC that he now owns 7.02% of the company, up from his 6% stake disclosed earlier this year. In his original 13D filing, he stated that these transactions were for "investment purposes" only. He began acquiring share in June at around $1.40 per share through July and August for prices as low as $1.18 per share and still now at $1.70 per share.

Pier 1 Imports, Inc. (NYSE:PIR) moved lower today after the company issued a clarification to comments made by Chairman & CEO Marvin J. Girouard to the press. According to the press release:

"Mr. Girouard was quoted as saying that he predicted the chances are '50-50' that the Company's Board will reach an agreement with a buyer on a sale price. Mr. Girouard was also reported as saying that a deal would likely happen quickly. He was quoted as saying that, 'It would be in weeks, not in months.'"

The press release goes on to clarify the company's situation:

"Since May, Pier 1 has agreed to provide confidential financial data to several entities for the purpose of permitting those entities to consider a possible transaction with Pier 1, one of which was the investor to which reference was made in the articles [Jakup a Dul Jacobsen, a Danish investor who owns 9.8% of the company. See our previous article on this topic.].

To date, Pier 1 has received one preliminary indication of interest, but the entity submitting that indication of interest subsequently advised Pier 1 it would not continue further discussions with Pier 1 regarding a possible transaction. Pier 1 has had no other substantive discussions, to date, with any of the other entities regarding a possible transaction ... Pier 1 makes no prediction whatsoever as to when, if ever, Pier 1's Board will reach an agreement with respect to a proposed transaction."

Despite its large cash position, a declining free cash flow and negative margins may spell trouble for the company if it cannot find a buyer, especially after the company recently cut its dividend. Shares are currently trading down nearly 3%.

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Titanium Metals Corporation (NYSE:TIE) revealed today in a Form 4 filing with the SEC that it's Chairman & CEO, Harold Simmons, purchased another 200,000 shares on the open market today in a deal worth over $4.7 million. He had previously bought 155,400 in September and 125,000 shares on July 14th. This transaction brings his stake to over 61 million shares. TIE has been slowly trending down to $23.82 after peaking at a split-adjusted $44.81 per share in May. The company is a producer of titanium products used in the aerospace industry among others, and has benefited from the spike in the aerospace industry (by companies like Boeing) for titanium used in their landing gear and other parts. The company's stock has dropped recently as commodity prices have slid to lows and inflation pressure has mounted. This insider buying activity could indicate that the CEO believes the company is ready for a turnaround.

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Alliance Data Systems Corp (NDAQ:ADS)
8K Filing by the Company
Alliance announced today that it would be instituting a buyback program to repurchase up to $600 million of its common stock through 2006. This is significant because Alliance's market cap is only $4.52 billion, which makes this transaction cover around 14% of the company's outstanding stock.

Hastings Entertainment, Inc. (NDAQ:HAST)
8K Filing by the Company
Hastings announced today that it would buyback $2.5 million worth of shares because it believes its stock is current undervalued. This follows the company's previous arrangement to buy back $12.5 million, of which it still has $3.6 million remaining. The company is trading well below its enterprise value ($117 million EV with an $81 million market cap!).

SAIC (NYSE:SAI)
S1/A Filing by the Company
SAIC said today that it would be pricing its shares between $13 and $15 with 75 million shares being issued. The company also revealed that it would be issuing a special dividend of between $1.6 billion and $2.4 billion paid to investors holding prior to the public offering. This is likely occurring because the company is currently employee-owned - so, this would be a bonus before they go public. The company also revealed it was growing at an annualized rate of 15.5% with revenues of $7.8 billion during their latest fiscal year.

Northfolk Southern Corp (NYSE:NSC) announced today in an 8K filing with the SEC that it would buyback an additional 50 million shares after already purchasing 17 million last quarter. The transaction is valued at over $900 million, while the previous transaction was valued at $730 million. The stock is off its high of $56 in May to it's current level around $44. The company is currently trading below enterprise value with a PEG of only 0.84 - making it significantly undervalued. This buying could indicate that the company believes it is at a bottom.

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Banta Corporation (NYSE:BN) announced today in a press release that it has rejected Cenveo's increased bid to buyout the company. We covered Cenveo's bid in a previous article in September, when they offered $47/share for the company and called the company's actions "110% un-American". Cenveo also threatened to take other actions, which were not detailed. The only way for them to acquire the company without shareholder approval of a bid is through a hostile takeover, where Cenveo would begin acquiring Banta share on the open market until they achieve a majority position (which would be reported in 13D filings with the SEC). Then, they could nominate their own directors to the Board and attempt to take over the company in a proxy battle. However, this is a very expensive process, making it an unlikely scenario. The alternative is for them to raise their bid even higher, in hopes that the Board will approve.

In the press release, Banta also said it would seek other ways to increase shareholder value:

"The Board has authorized management, in consultation with its financial advisor, UBS Investment Bank, to explore all potential strategies for further maximizing shareholder value, including, but not limited to, remaining independent, joint ventures, mergers, acquisitions, further return of capital, or the sale of the Company ... The Company also advised that it does not intend to disclose developments regarding its evaluation unless, and until, a final decision is made."

The Board is most likely hesitant to sell the company at $47 because the stock has already traded as high as $52 this year - the only reason Cenveo was able to place an offer at such a premium is because the company's stock dropped to $34 after they lowered their FY 2006 guidance. As a result, the Board may see this offer as not having the premium that most people expect when buyout offers come. Moreover, Cenveo may have problems convincing other shareholders to sell out at this price for the same reason - many shareholders may have been buyers in the $50's, so the $47 offer does not represent a premium.

What happens with the evaluation of strategic alternatives remains to be seen. Cenveo has called this process a joke, stating that management never had any intention of doing anything to help the company's shareholders. However, if the company does follow though with its review process, it could result in a special dividend, share buyback program, or even a sale, which could open up the company to a bidding war. The results of this can be found in the company's future 8K filings, while any hostile action by Cenveo will be first seen in future 13D filings. This stock is definitely one to keep an eye on!

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FPIC Insurance Group, Inc. (NDAQ:FPIC)
8K Filing by the Company
FPIC said today that it had completed the sale of its insurance management operations in a deal valued at $40 million. The company said that it expects to realize an after-tax gain of approximately $12.5 million from the transaction, pending some closing arrangements. The stock was up 2% on the news in today's trading.

GigaBeam Corporation (NDAQ:GGBM)
8K Filing by the Company
GigaBeam announced its plans today to reduce its cash burn and improve its operating margins. According to the filing, the company is looking to cut pay and reduce its workforce as it transitions from product development to product marketing and sales.

Walter Industries (NYSE:WLT)
13D/A Filing by Pirate Capital
Pirate Capital revealed today in a 13D/A filing that it had sold some of its stake in Walter Industries. This news comes after the fund experienced problems last month when it failed to disclose its sale of OSI in a timely manner. This resulted in several key investors taking out their money, and several managers being fired.

Western Union (NYSE:WU)
General Information
Western Union shares began trading on the NYSE today under the symbol "WU". Shares were roughly even today after an unusually small amount of activity for a spin-off. See our previous story for more information about the spin-off, its valuation, and its prospects.

PW Eagle Incorporated (NDAQ:PWEI) revealed today that Caxton Associates again raised their stake in the company to 8.5%, which comes after Pirate Capital LLC raised their stake on Friday to over 22%. We first noted the Caxton and Pirate's interest in the company back in August, in which we speculated that the company may eventually be forced to "explore strategic alternatives" that could include a sale of the company, although only a share buyback plan has been instituted to date. The company also announced that they would support Pirate's move to install some of its own Board members and appoint a special committee to explore these strategic alternatives. As of now, there is no actual indication of their plans; however, when two activist hedge funds acquire shares at this rate (especially after Pirate's troubles), there is probably more to the story than we know at this point. This is definitely a stock to keep a close eye on as these events unfold.

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The Western Union Company (NYSE:WU) began trading as a seperate entity for the first time today after being spun-off from First Data Corporation (NYSE:FDC). FDC shareholders had received on share of WU for each share of FDC that they owned, in a 765 million share tax-free distribution. Western Union also announced a $1 billion share buyback program to be completed by the end of 2008, after having issued $3.5 billion in debt to finance the spin-off.

Spin-offs and their parent companies typically outperform the overall market within their first year, according to several published studies. There are two factors that contribute to this: (1) corporate/capital structure improvements, and (2) baseless selling by uninterested shareholders. Most analysts agree that both Western Union and First Data Corp will benefit on a structural basis from the two companies being seperated; however, since Western Union is so well known (and even being accepted into the S&P 500) there will probably be no baseless initial sell-off that would create great buying opportunities. Despite this, Western Union appears to be a strong company with a great ability to generate cash, while FDC still has a higher breakup value than its market price. Many analysts suggest the company could trade anywhere between $22 and $27 based on an analysis of their peers.

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