Cornell Companies Inc. (NYSE:CRN) shares moved up $0.31, or 1.61%, to $19.61 in today's afternoon trading session after Wynnefield Partners disclosed a 17.5% stake in the company Friday afternoon. This jump comes after Cornell agreed to be acquired by Veritas Capital for $18.25 per share in cash. The optimism was spurred when fund said that they "continue to believe that the shareholders would best be served if the company were to remain an independent entity and participate in the growth opportunities that exist in the private corrections industry". The fund also noted that Patrick Swindle of Avondale Partners stated in January that the company "appears to have meaningfully improved its position with what appears the addition of 500+ inmates based on our analysis ... these extra inmates could add $10.0 million in incremental revenue and $2.0 million to $2.5 million in incremental EBITDA at full capacity." Investors are betting the Wynnefield will be successful in blocking the company's merger with its 17.5% stake - a move which could result in a higher bid by Veritas. This makes CRN a stock worth watching closely over the next few months.

Cornell Companies Inc.'s principal activity is to provide correctional, treatment and educational services outsourced by federal, state and local government agencies. The Group provides a diversified portfolio of services for adults and juveniles through three operating divisions: adult secure institutional services, residential and community-based juvenile justice, educational and treatment services and adult community-based corrections and treatment services. The services of the Group include incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment and 3-12 education. The customers of the Group are Bureau of Prisons, U.S. Marshals Service, Department of Homeland Security, Bureau of Immigration and Customs Enforcement, county sheriffs, and city. As of 14-Feb-2005, the Group has 67 facilities in 16 states and the District of Columbia.

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Tribune Company (NYSE:TRB) shares moved down $0.33, or 1.08%, to $30.19 after the company hinted on Saturday that it might not go through with a sale of the company. William Osborn, chairman of the special committee to explore strategic alternatives, sparked the controversy by saying that the company was currently exploring its options which include "potential transactions involving third parties as well as actions the company may take alone". According to an article in the Chicago Tribune, these actions could include assuming a substantial amount of debt to issue a special dividend to shareholders, selling or spinning off broadcast assets, or assembling a smaller leveraged buyout than originally expected to take the company private.

This news comes after shares rose more than 4% last week when the company received a $31.70 per share offer disclosed by the Chandler Trusts - the company's largest shareholder. The offer - which remains the best on the table - involves $19.30 per share in cash combined with stock from a spin off of the company's broadcast and entertainment business. The Board of Directors is also reviewing two other bids, including a $500 million bid for 34% of the company by two billionaire investors as well as the Carlyle Group's bid for the company's broadcast assets. Regardless, this is definitely a stock to keep on the radar as many people have a keen interest in the company.

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Lodgian, Inc. (AMEX:LGN) moved up $1.15, or 9.6%, to $13.13 in early trading today after the company announced that it has initiated a review of possible strategic alternatives aimed at unlocking shareholder value. The company said it has retained Goldman, Sachs & Co. and Genesis Capital, L.L.C., to assist in the review. Lodgian also noted that they would not be providing updates on this process until it is completed and approved by the Board of Directors.

What can shareholders expect? Well, Lodgian is one of the largest independent owners and operators of full-service hotels in the United States. In December of last year, the company announced plans to reduce its portfolio to 43 core properties and said that it aims to sell 75% of its saleable properties by the end of the year. The sale of its 27 properties currently on the market is expected to generate between $115 and $122 million. This leaves the company with significantly reduced operating cash flows and a significant amount of extra cash. Typically, companies in this situation will approve measures to distribute this extra cash to shareholders - like instituting a dividend. Another possibility is spinning off the company's property holdings into an REIT, shielding them from a lot of taxes and unlocking the properties' true value. Finally, there is always the possibility that the company will put itself up for sale in a market ripe with acquisitions. Regardless, this is definitely a company to keep an eye on as it moves to adopt measures to unlock shareholder value.

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