Lear Corporation (NYSE:LEA) shares moved down $1.01, or 2.52%, to $39.06 today after the company formally accepted Carl Icahn's offer to purchase the company for $36/share in cash. Why is Lear trading significantly above the buyout premium at over $39 per share? Well, many investors are saw the statement from Deutsche Bank analyst Rod Lache, where he said he believes the deal undervalues Lear and that he found it surprising the company agreed to sell itself at a discount from its current price. Other point to strong opposition voiced by Pzena Investment Management, who said a couple of days ago that the company's real value is closer to $60 a share with earnings likely to recover to $4 a share in the next few years.

According to the Schedule 13D/A filed by Carl Icahn today:

On February 9, 2007, newly-formed subsidiaries of AREP entered into an Agreement and Plan of Merger with Lear Corporation ("Agreement") calling for a merger of Lear and one of such subsidiaries pursuant to which Lear will become a subsidiary of AREP and stockholders of Lear will receive $36 per share in cash. The Agreement provides that Lear will immediately commence a "go shop" period of 45 days pursuant to which it will seek buyers for Lear who may offer better terms and conditions from a financial point of view. The Agreement provides that in the event of termination of the Agreement under certain circumstances, the subsidiaries will be paid a breakup fee by Lear. Consummation of the Agreement is conditioned upon a favorable vote of the Lear stockholders, regulatory filings and approvals and customary closing conditions.

The key clause to take out of this is the section mentioning that Lear will immediately commence a "go shop" period of 45 days where they will attempt to find a buyer who may offer better financial terms and conditions. While this is a positive for many investors, finding another bidder would still be a long shot. Carl Icahn's large existing stake in the company combined with the high failure rate of "go shop" periods greatly diminishes the liklihood of another bidder surfacing. Either way, this is definitely a stock to keep an eye on over the next couple of months as the company shops around for other potential bidders.

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Fortress Investment Group (NYSE:FIG) shares opened at $35, up 86%, in their debut on the New York Stock Exchange. The IPO marks the first hedge fund to go public and could mark the start of a new trend as hedge funds look for ways to attract more and more capital. Fortress's IPO priced at $18.50 a share late Thursday, at the top end of a previously disclosed range of $16.50 to $18.50. The IPO offering raised $634 million for Fortress.

According to the fund's S-1 filing with the SEC:

Fortress is a leading global alternative asset manager with approximately $29.9 billion in assets under management as of September 30, 2006. We raise, invest and manage private equity funds, hedge funds and publicly traded alternative investment vehicles. We earn management fees based on the size of our funds, incentive income based on the performance of our funds, and investment income from our principal investments in those funds. We believe our funds have produced consistently superior investment returns. We intend to grow our existing businesses, while continuing to create innovative products to meet the increasing demand of sophisticated investors for superior risk-adjusted investment returns.

Fortress will be the first global alternative asset manager listed on the New York Stock Exchange (NYSE: FIG). Fortress Operating Group will continue to own all of the businesses created by Fortress since 1998. We believe this offering is a unique opportunity to become aligned with our principals: Wesley Edens, Peter Briger, Robert Kauffman, Randal Nardone and Michael Novogratz. Our principals’ investing success has enabled us to grow rapidly while diversifying our management fee and incentive income streams. Our net income grew from $40.3 million for 2003 to $192.7 million for 2005, a 119% compounded annual growth rate ... We have grown our assets under management significantly, from approximately $1.2 billion as of December 31, 2001 to approximately $29.9 billion as of September 30, 2006, or a 96.8% compounded annual growth rate.

These are clearly impressive growth rates that warrant a close look at the stock. Given that this is the first hedge fund to ever IPO, the stock may experience volatility as investment professionals struggle to find a proper valuation. Meanwhile, this is definitely a stock to keep a close eye on!

The Brink's Company (NYSE:BCO) said that it had reached an agreement with Pirate Capital in which Thomas Hudson would receive a seat on the board in exchange for withdrawing his hostile proposals. The company said Hudson will serve on the strategy, pension and finance, and executive committees. This move marks a turning point in a long-standing battle between the two parties after Pirate amassed an 8.5% stake (their second largest) in the company and demanded that they retain an investment bank to explore a possible sale of the company. The hedge fund argued that the company would be worth between $68 and $72 per share in the event of a buyout.

Their efforts gained traction last December of last year when MMI Investments joined Pirate in the fight, saying: "Another large stockholder has raised the question of BCO pursuing a strategic alternatives review and indicated that it intends to submit a stockholder proposal to that effect at BCO’s 2007 annual meeting of stockholders. As we understand the proposal described in their Schedule 13D amendment, we are in support of it." With the new board seat, Pirate will likely be able to establish a committee to explore strategic alternatives which could result in an LBO, sale to a strategic suitor, tax-free split-up of the company, leveraged recapitalization, or another significant stock repurchase. Either way, BCO is definitely a stock worth keeping an eye on over the next few months!

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