ServiceMaster (NYSE:SVM) may be attracting some private equity firms, according to an article in the Wall Street Journal. There is talk on the street that the $3.2 billion company's healthy cash flows combined with shareholder unrest may prompt private equity firms to take action or perhaps even lead to a management buyout. The only argument against the notion is the company's strong religious culture; however, that did not stop other bids for the company in the past that were rejected. Shareholders may be more likely to support a buyout now, however, as the company's performance has stalled while its brands and image remain intact. The company's policy is to not comment on rumors; however, the company's stock moved up over 6% in morning trading on the news. This is definitely a stock to keep an eye on in the coming weeks in case any further evidence comes out supporting such actions.

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Delta Air Lines (OTC:DARLQ) said today in a press release that it plans to emerge from bankruptcy as a standalone carrier. This announcement comes after U.S. Airways proposed $8 billion merger, which would create the world's largest carrier. Under the merger, Delta creditors would get $4 billion in cash and $4 billion in US Airways stock. US Airways believe the such a merger would provide approximately $1.65 billion in annual cost savings. Many are saying that although the merger might make sense, it would involve a lot of work to successfully integrate the two carriers. The complexity of the deal alone may cause it to fail - similar to the way AOL/Timewarner failed. Regardless, this is definitely a situation to watch as management reviews the proposal despite its bias to remain a standalone carrier. The stock moved up 14% on the news so far in today's trading.

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Pier 1 Imports (NYSE:PIR) confused investors today as the stock rose almost 23% on no news. The rise prompted the NYSE to notify the company of "unusual trading activity" and encourage them to issue a press release. The company subsequently said that its policy is to not comment on rumors or unusual trading activity. However, Reuters recently shed some light on the situation, reporting today that Jakup Jacobsen is preparing to make a bid for the entire company, citing sources close to the situation. On September 21st, we noted in an article on SECInvestor that Jacobsen had signed a confidentiality agreement and speculated that the two parties might pursue a buyout agreement. With a 9.8% stake in the company and detailed financials, this buyout remains a very distinct possibility. Combined, these factors make this stock definitely one worth keeping an eye on.

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ICOS Corp. (NDAQ:ICOS) is finding itself under increasing pressure after it struck a buyout agreement with Eli Lilly. HealthCor, the fund leading the fight against the takeover, sent yet another letter to management criticising their bidding process and imploring them to break off the agreement. There are several other holders that are also displeased with the agreement and have vowed to vote against the takeover.

According to this latest 13D/A communication:

"The proposed purchase of ICOS by Eli Lilly is not an arm’s length transaction. The acquisition has not occurred in a market-based, competitive bid process. Therefore, in making its determination of fair value, we believe the Board of Directors must rely upon market-based comparables of similar transactions. We have clearly shown, in our initial communication to you, the flaws and distortions that are contained within the 'Fairness Opinion' provided by Merrill Lynch. Without a competitive bid and without a 'Fairness Opinion' that can be relied upon, the Board of Directors of ICOS is 'flying blind' while trying to assess appropriate value.

Our analysis is based upon objective data sourced from independent investment analysts’ projections as well as from the information provided by the Company in its November 1, 2006 Proxy Statement. As set forth in the following table, since the announcement of the proposed merger with Eli Lilly, three additional transactions have been announced in the relevant healthcare universe. These transactions are all at premiums significantly higher than the premium in the Eli Lilly/ICOS transaction, as currently proposed. The Genentech, Inc. purchase of Tanox, Inc. is particularly important as there is an ongoing partnership on the target’s lead commercial product, Xolair. While ICOS’ management might believe that ICOS is a 'captive target' for Eli Lilly and therefore unable to generate a fair price, the existence of a partnership did not prohibit Tanox, Inc. or Genentech, Inc. from agreeing on a fair price." (Read More)

Table
Merck (NYSE: MRK) - Sirna Therapeutics Inc. (Nasdaq: RNAI) 101.6%
Abbott Laboratories (NYSE: ABT) - KOS Pharmaceuticals Inc. (Nasdaq: KOSP) 55.7%
Genentech Inc. (NYSE: DNA) - Tanox Inc. (Nasdaq: TNOX) 46.6%

Finding comparable transactions is a very common way of valuing a business and HealthCor has compiled this data along with a fundamental analysis of the company to come up with a value of "well in excess of" $40 per share. Meanwhile, the current buyout stands at just $32 per share. This stock is definitely one to keep an eye on as the voting date of December 19, 2006 draws closer.

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Ampex Corporation (NDAQ:AMPX) revealed in a 13D filing with the SEC yesterday that ValueVest High Concentration Master Fund had accumulated a 8.3% stake in the company. This transaction took place after several communications between management and the fund involving a possible buyout or sale of the company's intellectual property.

According to the filing, the fund is interested in:

"In a letter to the chief executive officer of the Issuer dated September 13, 2006, the Investment Manager once again confirmed the Master Fund's interest in acquiring or making a further equity investment in the Issuer. In that letter, the Investment Manager also indicated that it would like to discuss an alternative transaction in which the Master Fund would acquire the Issuer's Data Systems business and all of its intangible assets other than those patents which the Issuer was currently licensing or litigating and their related patent families. The Investment Manager indicated that it believed that this alternate asset transaction, which would not be subject to any financing contingency or condition, could be implemented relatively quickly and would give the Issuer the opportunity to realize immediate value for its shareholders and to generate further shareholder value through its ongoing patent licensing and litigation efforts." (Read More)

The company said they would discuss this matter with ValueVest after the next annual shareholders meeting; however, there is no indication that such a meeting took place yet. Obviously, any transaction involving a purchase of the company's intellectual property or company would come at a significant premium to the current market price. The company is trading below enterprise value, down over 40% on the year, as it recently swung to a profit in Q3. This is definitely a stock worth watching as the company prepares for an official proposal.

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James River Coal Company (NDAQ:JRCC) may see some volatility in its future and Pirate Capital continues to unload shares of the company, moving its stake from 14.1% to 8.8% according to their 13D/A filing with the SEC. This news comes after Pirate announced that its board member, Matthew Goldfarb, had resigned after the fund's shakeup and that the company's strategic alternatives review process had ended unsuccessfully. This series of blows could spell bad news for investors as hopes of a turnaround become more and more dim while even more shares are suddenly being dumped on the market. The stock has already moved down from $40 in 2006 to under $10 today, which means large losses already suffered by Pirate Capital and other shareholders who have been along for the ride. But is a turnaround still possible? Well, the company's latest financials indicated wider losses for Q3 reporting an operating loss that more than doubled year over year to $10.46 million, so any improvements in their bottom line remains to be seen.

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Nabi Biopharmaceuticals (NDAQ:NABI) announced today in a press release that it had reached an agreement with activist hedge fund Third Point to settle their indifferences. The hedge fund finally received word from the company after threatening a proxy battle to takeover the company's Board of Directors.

According to the press release:

"Under the terms of the Settlement Agreement, Nabi Biopharmaceuticals has appointed two Third Point nominees, Jason Aryeh, founder and general partner of JALAA Equities, LP and Tim Lynch, president and CEO of NeuroStat Pharmaceuticals, Inc., to the company's board of directors. In addition, Nabi Biopharmaceuticals will establish a strategic action committee (SAC) to continue the company's previously announced process of exploring strategic alternatives.

The SAC will work with the company's financial advisor, Banc of America Securities LLC, and management to evaluate a range of strategic transactions and initiatives and will have responsibility for recommending specific actions to the Nabi Biopharmaceuticals' board. As part of the settlement, Nabi Biopharmaceuticals has agreed to pay up to $250,000 of Third Point's expenses and Third Point has agreed that it will not commence a consent solicitation or a proxy contest prior to the company's 2007 annual meeting of shareholders."

The company's president and CEO Tom McLain added, "Through this agreement Nabi Biopharmaceuticals and Third Point will avoid a costly and disruptive consent solicitation at a time when the company is exploring a full range of strategic alternatives to enhance shareholder value. Our board and management team can also remain focused on serving our customers and executing our business plan as we continue to pursue the exciting opportunities that lie ahead for our company."

This is good news for NABI shareholders, who are now more likely to find themselves in a buyout situation in the future. NABI is definitely a stock to watch as this situation continues to progress.

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KeyCorp (NYSE:KEY) could be a possible acquisition target for Bank of America (NYSE:BAC) according to a report by analyst Richard Bove. The analyst cites the fact that the Bank of America currently has a market share of about 9.2% (according to Federal Deposit Insurance Corp). This leaves it 0.8% below the 10% level that might prevent it from making further U.S. acquisitions. However, the bank is still able to acquire $54 billion in deposits before reaching this level, which would help it boost its competitive position. Bove goes on to say that KeyCorp would be an aquisition that would make the most sense, as it is in the midwest (where BAC has less branches) and is available for relatively cheap. The company is trading well under its enterprise value with a strong cash position of $11 per share; however, it does have a PEG of 1.68, which makes it slightly overpriced given its growth rate. Both companies have not commented on the speculation, however this is definitely a stock worth keeping an eye on!

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NYMEX (NYSE:NMX)
S-1/A Filing by the Company
NYMEX set its pricing range between $48 and $52 today as it prepares for its debut on the NYSE. The IPO is likely to be very hot after the recent CBOT/CME merger and speculation surrounding the NYSE and NASDAQ. Pricing is expected to be announced later this week.

Tribune Company (NYSE:TRB)
8K Watch
Tribune saw increased attention today as the WSJ reported that the company could see a number of deep-pocketed bidders eager to acquire the company. The WSJ reported that GCI could make a bid for the company, while the NY Times reported Maurice Greenburg (from AIG) is interested in submitting a bid. Meanwhile, the options volatility has increased substancially as the speculation continues.

LightReading is reporting that several bidders are interested in 3Com Corporation (NDAQ:COMS), driving the stock up over 3% in today's trading. According to the article, interested parties may include Nortel Networks (NYSE:NT), Juniper Networks (NDAQ:JNPR), and a range of private equity players. The Wall Street Journal reported awhile back that these private equity players were interested in 3Com's assets - players including Texas Pacific Group, Bain Capital, and Silver Lake Partners. These parties are not only interested in 3Com itself, but also their majority ownership of Huawei - a strong player in Asia. With all of these parties interested in a piece of 3Com, there is potential for a bidding war, which typically results in high buyout premiums. This makes COMS a stock worth watching closely as this situation unfolds!

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