Weyerhaeuser Company (NYSE:WY), which has moved up well over 40% since the middle of 2006, is now considering making changes to its centuries old corporate model. Many activist shareholders have been pushing the lumber giant to sell everything but its timberland operations and restructure itself as a Real Estate Investment Trust (REIT) in an effort to save millions with the new tax structure. The company initially resisted the idea, however, opting to maintain its current corporate structure while pushing for federal legislation that would make it cheaper to operate its timberlands. But recently, the company announced that it would explore all of its strategic options, including a possible restructuring.

Why the commotion? Well, Weyerhaeuser first caught the attention of investors after a series of transactions in the timberland sector gave some insight into the value of their real estate holdings, which some estimate as high as $3,000 per acre. And given the company's 5.7 million acres of land in the Pacific Northwest, the valuation of their timberland operations becomes a huge number! Investors speculate that the company could be valued at around $83 per share if the company's divisions were split up or sold off and as high as $108 if it converted itself into a REIT without a big tax penalty. Investors also stand to gain substantially if the company's proposed legislation (sponsored by Artur Davis) passes, which would cut the company's tax rate by 60% to about 14% - roughly the same as an REIT would pay. Now that the company is officially exploring these strategic options, WY is definitely a stock to keep a close eye on!

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Applebee's International, Inc. (NDAQ:APPB) moved up $0.06, or 0.24%, to $25.23 today after Breeden Capital the company's offer for two seats on the Board of Directors. Breeden Capital had been seeking four seats in what has been a long standing battle with the company. We first began covering this story back in December when Breeden Capital expressed disappointment with the company's operating results and valuation. Specifically, the hedge fund pointed out APPB's chronic under-performance compared to other company's in its peer group. They noted Applebee’s performance was 113.3% worse than Darden, 51.7% worse than the S&P 500, and 47.4% worse than the 75th percentile of the casual dining peer group. Moreover, they pointed out the company's deteriorating fundamentals by showing declining same-store sales (5.2% to -1.0%), declining operating margins (16% to 12.4%), and declining return on capital invested (16% to 10%). Clearly, there is cause for concern at Applebees!

So, what does the hedge fund plan to do about it? Well, they outlined several changes that they would make in a past letters to the Board of Directors:

1. Significantly reduce the number of company-owned restaurants by re-franchising a substantial number of restaurants in a multi-year program.
2. Cease all further capital expenditures to open new company-owned restaurants, and minimize capital expenditures to renovate company-owned restaurants pending their sale.
3. Reduce overall expense levels, especially in corporate level overhead, and dispose of non-core assets.
4. Use excess cash generated from these steps and improved performance to increase the return of free cash flow to shareholders.
5. Improve various governance practices, including reducing the number of insiders on the company's board, precluding former CEOs from continued board service, strengthening independence requirements, eliminating the personal use of corporate aircraft and abolishing your staggered board.
6. There should be a moratorium on any incentive compensation for any tier one executives so long as TSR remains negative. Similarly, incentive compensation should be zero if the company remains in the fourth quartile of relative performance in generating TSR.
7. A large proportion of incentive compensation (such as 50-75%) should be based on relative measures of performance compared to the company’s publicly traded casual dining competitors.
8. Growth in average per restaurant royalty fees from franchise operations should be included as an incentive target for relevant executives (including the CEO and CFO), since franchisees represent 73% of the company’s system.
9. The level of free cash flow would be a healthy measure for some portion of incentive opportunities, especially for the CEO and CFO.
10. Minimum relative performance in generating TSR or EVA (such as being in the top 20%) should be a significant part of every executive’s target incentive eligibility. All executives should have a vital stake in the company outperforming its peers.
11. Personal use of corporate aircraft should be banned. Tax gross-up payments made during the last three years should be repaid to the company.

So, what happens now? Well, since Breeden Capital has rejected the two board seat offer, it is up to the company to either produce a counter-offer of four seats or face a possible proxy fight. The first step to watch for that would indicate a proxy fight would be an official declaration by Breeden asking for the company's shareholder records so they could mail proxy materials - which would be found in a future DEF14A filing with the SEC. Meanwhile, if the hedge fund's nominees are elected to the company's Board of Directors, it could mean significant share appreciation over the long-term for the company's shareholders. This makes APPB a stock worth watching!

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Stonepath Group, Inc. (AMEX:STG) will face some shareholder opposition to its proposed restructuring plan after a group of shareholders owning a combined 32% of the company's outstanding shares voiced their concerns in a Schedule 13D filing with the SEC. The hedge fund syndicate include Strategic Turnaround Equity Partners, Galloway Capital Management, Gary Herman and Bruce Galloway.

The company announced an agreement with Mass Financial in February whereby they would acquire Stonepath's entire credit facility from Laurus Master Fund, Ltd. and provide the company with a $20 million line of credit. Shareholders are angry with this agreement for two reasons. First, Mass Financial had to purchase Stonepath's entire credit facility from Laurus Master Fund, to which Stonepath will be required to issue 3.5 million shares of common stock or 7.9% of the current number of shares outstanding! Secondly, under the terms of the agreement, the credit line will be convertible into Stonepath stock at a conversion price of 85% of its value. This would enable the finance company to purchase twice the Stonepath's current number outstanding shares at an 85% discount! Combined, this "hyper-dilution" of common stock could dramatically reduce share value, which is why the group of investors sent a letter to the Board of directors indicating their concern and urging them to explore a structure that is not as dilutive to common stock shareholders.

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Tribune Company (NYSE:TRB) said that it plans to keep its remaining newspapers after announcing the sale of The Advocate and the Greenwich Time to Cannett Co. earlier this week. The company first announced that it was considering the sale of some or all of its company last September, under pressure from Chandler Trusts. Since then, it received a number of offers from the Carlyle Group, Eli Broad and Bon Burkle among others but turned each one of them down. Recently, the special committee assigned with exploring strategic alternatives was reportedly leaning towards a restructuring that would involve a spin-off of the company's television stations and a large special dividend payout with the proceeds. The committee was also rumored to be looking at a buyout bid for the entire company from billionaire real estate mogul Sam Zell. Regardless, Tribune is definitely a stock worth watching as they explore options for the company.

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Ford Motor Company (NYSE:F) shares jumped $0.31, or 4.07%, to $7.93 today after the U.K. Daily Telegraph reported that the company would sell its Aston Martin division by Friday at the opening day  of the Geneva Motor Show. The sale will be made to a consortium of business interests from the U.S. and Middle East, headed by Prodrive founder and world rally champion owner David Richards. The price is rumored to be near GBP500 million, which is roughly half of what Ford originally asked for six months ago. The transaction should prove to be a boost for the struggling automaker's cash position, which makes Ford a stock to watch.

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Friendly Ice Cream Corporation (AMEX:FRN) share moved up $1.87, or 15.71%, to $13.70 today after the company announced that it retained Goldman Sachs to assist the Board of Directors in exploring strategic alternatives to enhance shareholder value, including a possible sale of the company. We first began covering FRN back in November and again in December when we noted that the Lion Fund had established a stake in the company and sought to unlock value through a possible sale. Since then, the stock has risen more than 30% including today's 15% gain as the company finally agreed with the company. Now, many investors are betting that the company will put itself up for sale with Mr. Biglari of the Lion Fund being a potential bidder.

This story was one of the more interesting fights we've seen between shareholders and management. Shareholders first established a group to fight the company, complete with a website: http://www.enhancefriendlys.com. Shortly thereafter, the shareholders took things even further by putting up billboards near the company's headquarters publicizing the fact that their company needed fixing. The giant billboards claimed that two board candidates they proposed are "Good for Employees, Franchisees, Shareholders". This campaign - designed to target ordinary investors - was clearly designed to cut into day-to-day operations. And while the campaign wasn't unprecedented, it was certainly unusual by any standard! Regardless, FRN continues to be a stock worth watching as the company mulls its options.

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Take-Two Interactive Software, Inc. (NADQ:TTWO) shares moved up $2.86, or 16.24%, to $20.47 after several investors collectively holding 46% of the company's outstanding shares reached an agreement with the company to vote in a new slate of six directors, according to a Schedule 13D filed today with the SEC. The investment group consists primarily of OppenheimerFunds, SAC, Tudor Investment, DE Shaw Valence and ZelnickMedia. The new nominees for the Board of Directors include former BMG Entertainment CEO Strauss Zelnick, former News Corp executive Benjamin Feder, Jon Moses, Michael Dornemann and Michael Sheresky. Many analysts and investors are predicting that the proposed management change would have a positive impact on the company, after it suffered losses for the past four quarters.

What does the group aim to accomplish? Well, they started by asking the company to grant them the power to replace the current Chief Executive Officer and review the current Chief Financial Officer. Secondly, the group setup a "Management Agreement" whereby ZelnickMedia will receive a monthly management fee of $62,500, an annual bonus of up to $750,000, an option to purchase 2.5% of the company's common stock on a fully diluted basis, and shares of restricted stock. Not to mention the company will be forced to reimburse ZelnickMedia for all expenses related to the Management Agreement and other related transactions. Will the costs be worth it? Well, given the poor performance we're seeing from current management along with the recent options backdating scandal, many investors are willing to take the chance. TTWO is definitely a stock worth watching as the new management team attempts to turn around the company!

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Cost-U-Less, Inc. (NDAQ:CULS) announced yesterday that it entered into separate letter agreements with two activist hedge funds that have been pushing for changes. Delafield Hambrecht and Chadwick Capital Management reached an agreement with the company whereby the company would nominate and support John D. Delafield for election to the company's Board of Directors in 2007 and submit a proposal to remove the requirement that a business combination be approved by holders of at least 2/3 of the oustanding common stock under certain circumstances. Meanwhile, the two hedge funds agreed to support the slate of directors nominated by the company and not propose any other business or conduct a proxy solicitation at the 2007 annual shareholders meeting.

We first took note of this company back in December when Monarch Activist Partners suggested that the company put itself up for sale in a Schedule 13D/A filing with the SEC. About a month later Delafield Hambrecht issued a similar demand in their own Schedule 13D/A filing, reasoning that CULS is worth at least $12 per share. Delafield even hinted that they would be a potential bidder in the event of a sale, although admitted that a strategic buyer would likely be willing to pay more. Shortly thereafter, the company responded by saying that it had contacted several investment bankers and other advisors in order to help them explore strategic alternatives. Interestingly, the latest advisor that they hired happens to be Cascadia Capital - a Seattle-based investment bank with a nationally recognized M&A advisory practice. With a fresh new seat on the Board of Directors and less stringent business combination requirements, the odds of a sale taking place just greatly increased! This makes CULS a stock worth watching closely!

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Digital video recording service provider TiVo Inc. (NDAQ:TIVO) posted a narrower Q4 loss Wednesday, beating Wall Street expectations. The Alviso-based company reported a quarterly loss of $18.7 million, or $0.19 per share, for the three months ended Jan. 31. In the same period last year, TiVo's net loss was $21.1 million, or $0.25 per share. Net revenues climbed to $77.6 million from $60.1 million a year ago.

Capitalizing on the popularity of social networks and online worlds, Sony (NYSE:SNE) will launch its own virtual universe and another 3-D game built almost entirely by players. "Home" is a real-time, networked world for the PlayStation 3 in which players create human-looking characters called avatars. They can buy clothing, furniture and videos to play on a virtual flat-screen television in their virtual apartments. Sony will launch a beta version in April and officially debut in the fall as a free download on the PlayStation online store.

Martek Biosciences Corp. (NDAQ:MATK), which makes nutritional oils to supplement baby food, said it expects a Q2 net income between $4.8 million and 5.8 million, or $0.15 to $0.18 per share. Analysts expect earnings of $0.17 per share, and revenue forecasted at $73.7 million in revenue. Martek is expecting revenue between $73 million and $74 million. As well, the company released that their Q1 profit fell 32% due to higher operating costs.

Biotechnology company OncoGenex Technologies Inc., which has been trying to launch its initial public offering in a week of stormy trading on the world's stock markets, withdrew its IPO. Plans to begin trading later in the week were not realized, and the IPO was pushed into this week. Last Thursday, the company lowered its estimated IPO price range to $7.50 to $8.50 a share, from $10 to $12 in an amended filing with the SEC. The underwriters also increased the size of the offering to 5 million shares from 4.5 million shares. OncoGenex is attempting to commercialize new cancer therapies that address treatment resistance in patients.

Athletic shoe retailer Foot Locker Inc. (NYSE:FL) said it expects its Q1 and full-year earnings to fall short of Wall Street expectations. The company is projecting quarterly earnings of $0.34 to $0.37 per share. In the year-ago quarter, Foot Locker earned $0.37 per share. Analysts expect higher earnings of $0.41 per share. For the full year, the company expects earnings of $1.55 to $1.65 per share, while analysts are looking for earnings of $1.74 per share.

Polypore, Inc. (PPO) today announced net sales of $124.9 million for the three months ended December 30, 2006, representing a 23% increase over Q4 2005.

Mamma.com Inc. (NDAQ:MAMA), a Montreal-based Internet search engine, reported a Q4 profit, reversing a year-ago loss, as the company expanded distribution and signed new clients. Net income totaled $420,175, or $0.03 per share, from a loss of $762,555, or $0.06 per share, a year ago. Q4 revenue more than doubled to $3.6 million from $1.6 million a year ago.

Express Scripts Inc. (NDAQ:ESRX) announced it has increased its bid to acquire Caremark Rx Inc., but company officials said they expect closer scrutiny from federal regulators over the proposed deal. Express Scripts' offer is to acquire all outstanding shares of Caremark for $29.25 in cash and 0.426 shares of Express Scripts stock for each share of stock in Nashville-based Caremark. The St. Louis-based pharmacy benefits manager said it will now pay additional cash consideration of nearly 6% per annum on the $29.25 cash portion of its offer.

Citigroup Inc. (NYSE:C), which earlier this week announced that it was bidding on a major Japanese brokerage, also is looking to purchase a Taiwanese bank. Citigroup, the largest bank in the United States, has agreed to pay $424 million to acquire the Bank of Overseas Chinese in Taiwan.

Discount carrier JetBlue Airways (NDAQ:JBLU) named a new chief operating officer on Wednesday, shoring up its management team just weeks after suffering a major service meltdown. Russell Chew, former chief operating officer at the U.S. Federal Aviation Administration, will assume the COO role at JetBlue on March 19. Oversight of JetBlue's daily operations was previously handled by President David Barger to whom Chew will report.

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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