# Tuesday, March 06, 2007
DaimlerChrysler AG (NYSE:DCX) shares moed up $1.78, or 2.71%, to $67.58 after Cerberus Capital Management executives met with the struggling automaker this week to discuss a potential bid. This news comes as the Blackstone Group is also set to meet with management later this week, according to the Detroit News. Interestingly, some investors are also speculating that GM could also be a potential suitor. Multiple interested parties is definitely good news for shareholders as there is potentially room for a bidding war, which we know from Equity Office Properties (NYSE:EOP) can be extremely profitable!

Shares of the GermanAmerican manufacturer hit a seven-year high last month when CEO Dieter Zetsche put "all options on the table", opening up the possibility of a sale of the company. The stock has seen significant volatility due to speculation, having moved from a low of around $45 per share in mid-2006 to a high of $74.53 before retracing to around $67 per share. Meanwhile, CEO Tom LaSorda stated last month that any official word on the buyout speculation could be months away. So, what's the next move for investors? Well, many investors are waiting to gauge the interest of the two parties in Chrysler before taking a stake; however, if the two parties turn out to be interested, it would mean significant share appreciation for shareholders! This makes DCX a stock worth watching!

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Tuesday, March 06, 2007 5:04:14 PM UTC  #     |  Trackback
Inter Tel, Inc. (NDAQ:INTL) shares moved up $0.20, or 0.87%, to $23.27 today after Steven Mihaylo filed a Schedule 14A to solicit proxy materials and nominate his slate of five directors to the company's Board. Mr. Mihaylo, a 19.4% stakeholder, first contacted the Board of Directors on January 19, 2007, when he sent a letter expressing hope that the two parties could develop a plan of action to lead the company forward with a renewed focus on enhancing shareholder value in the near and longer term. On January 22, 2007, Mr. Mihaylo received a response letter from the company expressing appreciation for the constructive tone and indicating that the company would contact him shortly to discuss the ideas raised in the letter. Following this exchange, Mr. Mihaylo and the company held several discussions in an attempt to resolve the differences between the two and avoid a proxy contest. However, these discussions were unsuccessful.

What changes does Mr. Mihaylo want to make? Well, his January 19th letter outlined nine major changes:
  1. Consider reducing the size of Inter-Tel's Board from 11 to 10 members, with the Board consisting of (a) the Chief Executive Officer, (b) Dr. Puri, Mr. Urish and me, (c) three other existing outside members of the Board, and (d) three new independent directors mutually acceptable to the Board and me. Alternatively, in order to save costs and facilitate the scheduling of Board meetings, I would be amenable to a 7 member Board, consisting of (a) the Chief Executive Officer, (b) Dr. Puri, Mr. Urish and me, and (c) three new independent directors mutually acceptable to the Board and me.
  2. Retain a financial advisor to advise the Board on the feasibility and financial impact of a Dutch-auction self tender offer to repurchase between $200 million and $250 million of the Company's common stock.
  3. Disband the Special Committee, thereby eliminating all of the costs associated therewith.
  4. Direct management to (a) undertake an intensive cost-benefit analysis of (i) discontinuing product development on the Axxess and (ii) redirecting the engineering effort to "gateway" products and "hosted services" offerings, including the necessary billing platform for hosted services, and (b) report the results of that analysis to the Board. I believe these actions will produce significant cost savings and provide significant sales opportunities.
  5. Consolidate the Company's multiple engineering facilities into the Chandler location. This will reduce overhead and improve productivity, while encouraging new and better ways to speed up product development.
  6. Explore the sale of the Company's Irish subsidiary, unless its performance significantly improves within a set period of time. This would enable management to concentrate on more profitable opportunities, as well as raise additional cash to offset the costs of the self tender offer.
  7. Explore ways to better utilize the Company’s 15 acre campus in Reno.
  8. Undertake an evaluation of the recommendations in the consulting report that the Mihaylo/Vector Group provided to Inter-Tel as a result of the Settlement Agreement executed in May 2006.
  9. Defer implementation of the proposed by-law amendments until the foregoing issues are actively considered.
Many of these changes would create immediate value for shareholders while others are focused on improving the company's longterm prospects. Stock repurchases tend to increase the stock price while the sale of the company's Irish subsidiary would likely generate a substantial amount of cash. Meanwhile, the other cost cutting measures outlined could help boost earnings per share in future quarters. Combined, these recommendations make a lot of sense (and we have no communications from the company explaining the issues they had with them). And with Mr. Mihaylo's 19% stake in the company, a proxy contest could have some traction. This makes INTL a stock worth watching!

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Tuesday, March 06, 2007 3:30:41 PM UTC  #     |  Trackback
Citigroup (NYSE:C) launched a $10.75 billion takeover bid for Japanese brokerage Nikko Cordial, offering cash to the scandal-hit firm's shareholders in a deal designed to transform its business in the world's second-biggest economy. Citigroup, the largest U.S. bank but a small player in Japan outside of corporate investment banking, said it would pay a premium to Nikko's closing price on Tuesday to lift its stake in Japan's third-largest securities firm from just under 5% percent to at least 50%.

CBS (NYSE:CBS) it is buying back about 47 million shares of its Class B stock for $1.4 billion through an accelerated repurchase transaction. The cost of the repurchased shares is subject to adjustment.

U.S. box office revenue reversed a three-year slide in 2006, with sales rising 5.5% to $9.49 billion, according to an industry group. The 607 films released in 2006, which include both major motion pictures released by MPAA members and smaller, independent releases ,marked an all-time high for a single year and an 11% increase over the 549 movies that hit theaters in 2005. Globally, box offices tallied $25.8 billion in sales, up 11% from $23.3 billion in 2005. International distribution and home entertainment sales account for a significant portion of major U.S. films' revenue.

Koch Industries, the world's second-largest private company, plans to team up with private equity firm Blackstone Group to join the bidding for GE Plastics, according to sources close to the process. The auction for GE Plastics, a unit of General Electric, comes amid concern that the profitability of the unit is eroding, and that the price tag on any deal is shrinking.The four leading bidders for GE Plastics - Apollo Management, Blackstone, Carlyle Group and Kohlberg Kravis Roberts & Co. - have signed agreements promising not to team up with each other, according to two sources involved in the process. GE Plastics recorded revenue of $5 billion for the first nine months of 2006, and profit of $560 million.

Strong earnings reports from apparel retailers and an online payment processing company boosted shares in Tuesday's after-hours electronic trading session.
Chico's FAS Inc. surged $1.17, or 5.7%, to $21.59 in the extended session, after the apparel maker and retailer beat Wall Street revenue expectations with its Q4 results, despite heavily discounted merchandise. Higher expenses dragged down quarterly profit, for the Fort Myers, Fla.-based company, however.

Payless Shoesource Inc. (NYSE:PSS) climbed $1.97, or 6.2%, to $33.40 in the late session, after the discount shoe retailer said it swung to a Q4 profit.
Canadian electronic payment processing equipment maker Optimal Group Inc. rose $0.99, or 12.7%, to $8.79 in the extended session.

Avalon Pharmaceuticals Inc.
(NDAQ:AVRX) shot up $1.27, or 27.4%, to $5.90 after the Germantown, Md.-based company said it is collaborating with Merck & Co. to develop inhibitors for an undisclosed target, focusing on cancer.

CV Therapeutics Inc.
(NDAQ:CVRX) plunged $3.20, or 26 %, to $9.10 in the after hours session, after the biotech said its angina drug ranolazine, or Ranexa, failed to meet its goal in a late stage study.

The Topps Co. (NDAQ:TOPP), maker of baseball cards and Bazooka bubble gum, has accepted a $385.4 million takeover offer from a buyout group that includes former Disney CEO Michael Eisner. The buyout group, which includes The Tornante Co. LLC, founded by Eisner, and the Chicago-based private equity firm Madison Dearborn Partners LLC, has agreed to pay $9.75 for each Topps shares, which represents a premium of 9.4% over the stock's Monday closing pricing of $8.91 on the Nasdaq Stock Exchange. In a sign that some investors think the bidding could go higher, Topps shares rose $0.90, or 10%, to close at $9.81 on the Nasdaq Stock Market. Its shares have traded between $7.50 and $10 over the past 52 weeks.

The DJ Wilshire Pharmaceutical Index jumped 1.2% to close at 2325.03 and the DJ Wilshire Biotechnology Index rose 1.1% to close at 3013.76. Novartis AG was the big mover among the large pharmaceutical players, its stock advancing 6% to close at $56.85. Intermune Inc. shares plunged 21% to $22.15. The biotech group is discontinuing a Phase III clinical trial for its pulmonary drug candidate Actimmune due to poor interim results. Pozen Inc. shares leapt 10% to $15.70. The drug developer announced favorable results from an early-stage clinical study of its aspirin product PA 325. The drug candidate combines aspirin and a proton pump inhibitor drug to combat gastrointestinal bleeding, a known side effect of aspirin.

Shares of RadioShack Corp. (NYSE:RSH) took back a week's worth of losses, finishing up 4.2% at $25.45, a 20-month closing high.

Circuit City (NYSE:CC) shares bounced off 15-month lows to settle at $17.96, up 2.8%. Share of Best Buy Co., the nation's largest electronics retailers, added 2% to $46.52.
Shares of Ann Taylor Corp. were higher by 3.5% at $35.31. The shares got a boost after Banc of America upgraded them to a buy from neutral with a $42 a share price target.
shares of Warnaco Group Inc. jumped 11.4% at the close to $27.58. Morgan Keegan & Co. raised its rating to outperform.

Tuesday, March 06, 2007 7:26:57 AM UTC  #     |  Trackback