Ceridian Corporation (NYSE:CEN) shares added $0.23, or 0.69%, today as investors applauded the company's decision to explore a broad range of strategic alternatives to enhance shareholder value. We know that Bill Ackman's Pershing Square initially requested that the company spin off its Comdata unit, which was an idea later supported by Relational Investors. The spin off would enable Ceridian to unload debt and cash in on its Comdata stake, while allowing Comdata to realize its intrinsic value on its own. Now that the company has agreed to explore possible alternatives, investors are just waiting for the board's decisions.

Interestingly, Bill Ackman disclosed (in a Form 4) that he purchased a million Jan '09 $24.43 American-style call options on February 12th at $9.89 a piece. These in-the-money options are convertible into common stock at a price of $34.32. Why would Ackman want in-the-money options? Well, it could be his ticket to a huge payday if the spin off ends up taking place! For only $9.89 per option, Ackman is able to guarantee himself a large stake in the Comdata entity when it is spun off to shareholders while leaving enough room to liquidate the options if it falls through. The move also gives Ackman the ability to convert the options to shares in the event he needs an additional 1,000,000 votes (ie. if management ends up rejecting his proposals). Combined, this move makes CEN a stock that is definitely putting on the radar for the next few weeks.

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American Strategic Income Portfolio (NYSE:ASP) is a diversified closed-end management investment company that invests in mortgage-related assets that directly or indirectly represent a participation in or are secured by and payable from mortgage loans. Sit Investment Associates filed a Schedule 13D/A with the SEC today stating that they believe the shares of ASP have been trading at a significant discount to net asset value during the past several years. Consequently, Sit Investment Associates, Inc. ("SIA") and its subsidiary, Sit Investment Fixed Income Advisers, Inc. ("SIFIA"), have determined that it is in the best interests of certain of their clients to pursue with the company changes in the ASP's practices that, if adopted, would provide a limited opportunity to shareholders of the Issuer to redeem their shares at net asset value, or to pursue other means which would enable shareholders to realize the net asset value for their shares of the company.

Now, they successfully did this once before in 1999, when the company listened to their request and repurchased 10% of their outstanding shares at net asset value. However, the company did not make a similar offer in 2001, despite being pressured to do so. A little while later, the board of directors for the company approved a proposal to reorganize the company into a specialty finance company that would elect to be taxed as a real estate investment trust (REIT). Under that proposal, shareholders who did not wish to receive shares of the REIT would have the option, subject to certain limitations, of electing to exchange their shares for shares of a newly cormed closed-end management investment company with investment policies, restrictions, and strategies similar to that of ASP. After this was announced, SIA held discussions with management about the proposal.

Now SIA and SIFIA are asking the company to implement this proposal or other possible alternatives that would reduce or eliminate the discount at which the shares of the company will trade in the future. These alternatives include a possible share repurchase (like the 1999 one) or implementation of the aforementioned REIT strategy. SIA and SIFIA both seek a way for shareholders to liquidate shares of the company at the company's new asset value. However, they did note that they do not seek to influence or control the management of the company. But with a 32% stake in the company, they have a significant voice in what goes on! Combined, these factors make ASP a stock that is definitely worth watching over the next few months!

Wolseley plc (NYSE:WOS) shares rose $1.86, or 7.18%, to $27.78 today after UK newspaper CityAM reported that Cinven has been working with Goldman Sachs to identify a buyer for its Wolseley US operations. The private equity firm reportedly approached Home Depot (NYSE:HD) about a possible sale, but was quickly rebuffed. Many investors believe that Wolseley's weakened share price - as a result of the housing bubble - makes it an attractive target, while today's interest rate hike improves its future prospects. Combined, this makes for a great opportunity for someone to step in and make a bid for the company. While all of this is still unconfirmed speculation, it does make WOS a stock that is definitely worth watching over the next few weeks!

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