Ceridian Corporation (NYSE:CEN) shares remained roughly even during the past two days after activist investors Bill Ackman's Pershing Square and Relational Partners LLC stepped up their efforts to convince the company to unlock value through a Comdata spin off and stronger focus on the company's grossly underperforming HR business. The most recent development began on January 18th when Ackman filed a DEF14A consent solicitation (the first step in a proxy battle) aimed at replacing the company's board during the next annual meeting. This came after Ackman held a three hour meeting with the new CEO in which she effectively shot down Ackman's proposal to spin-off Comdata and seemed unconcerned about the possible loss of Mr. Krow - a key figure in the company. Immediately after this DEF14A was filed, the company responded with a letter stating they were "very surprised" by the concerns in their letter and called the solicitation "unfounded and unwarranted". However, this appears to be too little, too late as Ackman continued to acquire substantial blocks of shares (revealed in a recent Form 4 filing with the SEC).

Relational Investors fired their own shots today in a letter saying that they had tried to contact management for over four months without success, and had begun selling their stake in the company as a result. The fund also voiced their support for Bill Ackman saying: "We want to make sure that the Board knows that we unequivocally support each of the points made in Pershing Square's letter. In particular, we think it was a major error to bring in a Chief Executive Officer who would stifle and frustrate the entrepreneurial and highly successful management team at Comdata instead of focusing on the woefully under performing HR business. We believe, as we have explained before, that Comdata should be liberated from the Ceridian business solution and that all focus, including the Board's, should be on restoring operational excellence to the HR business. We intend to vote our remaining shares in support of Pershing Square or other shareholders' efforts to correct these errors."

So where does it go from here? Well, sometimes activist hedge funds will make consent solicitations in order to get things accomplished faster than they would be through other meetings. An example of this strategy occurred today when Nussdorf acquired seats on Parlux's board without having to go through with a proxy battle. However, other times a proxy battle is the only way to get things done. Regardless, we will know whether or not Ackman successfully obtained board seats by the company's next annual meeting. If he is successful, we could very well see a spin off of Comdata as well as renewed focus on the company's HR division - developments which should increase CEN's shares substantially over the next year or two!

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Parlux Fragrances Inc. (NDAQ:PARL) shares moved up $1.08, or 17.22%, to $7.35 today after the company issued a press release stating that it had reached an agreement with Glenn Nussdorf. The history between these dates back to last September when we noted that Glenn Nussdorf had acquired a 15% stake in the company. Shortly after, Nussdorf expressed interest in acquiring the company (most likely for his E Com Ventures). Later that year in November, the activist shareholder expressed interest in obtaining board seats in order to prevent the company from materially modifying the company (in case he decided to acquire it) and make "immediate" changes at both the board and management level. And finally, in December he filed preliminary consent forms aimed at actively replacing the board through a proxy battle.

Today, the company finally bent to meet Nussdorf's demands. Under the terms of the new agreement, all lawsuits would be dropped between the two parties, the consent solicitation would be abandoned, CEO Ilia Lekach would immediately resign, and Nussdorf's nominees would be appointed to the board of directors. Regarding the agreement, Nussdorf commented: "My consent solicitation was about performance at Parlux, and the value of the shares which I and every other Parlux stockholder own. It was never about me. With a reconstituted Board of Directors and with Neil Katz serving as interim CEO, I am satisfied that I have achieved our goals. Our settlement agreement demonstrates the commitment of the Parlux Board to addressing stockholder interests in a positive way."

Under new management and direction, shareholders are hoping that the company will be able to return to its prior highs after falling almost 50% this year alone. The possibility also remains open that Nussdorf could orchestrate the buyout that he has talked about so much in the past. Combined, these two factors make PARL a stock that is definitely worth watching over the next few months!

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Lear Corporation (NYSE:LEA) shares rose $2.24, or 5.8%, to $40.88 in early trading today after Pzena Investment Management LLC voiced its opposition against Icahn's $36/share buyout offer, suggesting the stock's real value is closer to $60/share. Pzena sent a letter to the company's board of directors suggesting that earnings are likely to recover to more than $4.00 per share over the next few years from consensus analyst estimates of $2.00 per share for 2007, pegging the company's value closer to $60 per share.

The hedge fund also said that was concerned with the recent trend towards private equity firms teaming up with management to "steal" companies from their owners at the expense of shareholders. Consequently, Pzena reminded the board of its fiduciary obligation to shareholders and urged them to seek other offers for the company and exclude management from this process (since preserving their jobs and enriching themselves comes at the expense of shareholders). Combined, Pzena makes several valid points and shareholders seem to be applauding the idea as LEA shares are trading substantially higher than the buyout premium. Now that there could be additional offers for the company or a raised bid by Icahn, this is certainly a stock worth keeping an eye on over the next few weeks!

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