MAIR Holdings, Inc. (NDAQ:MAIR) shares rose $0.32, or 4.43%, to $7.07 today after Shultze Asset Management disclosed a 5.9% stake in the company and expressed their disappointment over the company's plan to pursue acquisitions that may be outside of the airline industry using shareholder cash. The hedge fund believes that the company's best course of action would be to distribute any and all cash remaining after the reorganization to shareholders as soon as possible in a tax-efficient manner.

Shultze also suggested that the company initiate efforts to sell its Big Sky subsidiary by immediately retaining a nationally recognized investment banking firm. In the end, the hedge fund believes that the company's shares are undervalued based on the amount of cash that would be distributed to shareholders if the board implements its suggestions. Finally, Shultze said that it would not be adverse to seeking representation on the board if necessary in order to pursue its objectives. Combined, these factors make MAIR a stock worth watching!

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Alcoa Inc. (NYSE:AA) shares jumped $2.19, or 6.45%, to $36.14 after the company announced that it would explore strategic alternatives for its packaging and consumer business. The company said it would consider all options available including joint ventures, a spin-off, or sale of the business. In 2006, these businesses generated revenues of about $3.2 billion - or 10% of Alcoa's income. CEO Alain Belda said, "Our packaging and consumer business is improving and strengthening. However, now is the right time for us to explore whether these businesses may provide more value on their own or as a part of another company."

Separately, Alcoa also announced that it would explore strategic alternatives for its electrical and electronic solutions unit and its automotive castings business. These businesses had revenues totaling $1.6 billion in 2006, although they were only marginally profitable. The company said the process of reviewing these alternatives would be completed by the end of 2007. Many analysts see the move as beneficial for shareholders as it would unlock the value in these segments while allowing the company to focus more on their core competencies. There have also been rumors that Alcoa may be a buyout target, and selling off these divisions would make the company substantially cheaper. Whether or not anything amounts from this analysis remains to be seen; however, this is definitely a stock to watch!

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Emmis Communications Corporation (NDAQ:EMMS) shares moved up marginally after Martin Capital Management disclosed an 8.4% stake in the company and recommended that the company sell WQCD and possible KMVN, WKQX, and WLUP. CL King & Associates analyst James Boyle said that the station could be worth as much as $150 to $200 million. Moreover, the other stations listed by Martin Capital in Chicago and L.A. would also go for similarly high amounts. Combined, these transactions could help unlock significant value for shareholders.

According to Martin Capital, "the company would certainly have an opportunity to monetize valuable assets that are not contributing to cash flow in appropriate proportions to their private sale value". The hedge fund also speculated that these sales were the motive behind last years management buyout offer that was rejected by the board of directors as inadequate. While Emmis Communications refused to comment on any buyout rumors, this is definitely a stock to watch!

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Bausch & Lomb Inc. (NYSE:BOL) shares dropped $2.49, or 4.02%, to $59.44 retaining most of their gain from yesterday's speculation that the company could be a buyout target. The stock, options, and credit securities of the company continue to be very active today as investors continue to bet on the possibility of an LBO. But is there any merit to these rumors? Well, the company is down significantly from its 2006 highs around $80 per share after the company was forced to recall 1.5 million bottles of its ReNu MultiPlus contact lense solution and guided lower for the quarter. While the company continues to struggle with turning itself around after that setback, it has made the company's shares cheap given their market dominance and large portfolio. Perhaps this is why people are looking at the possibility of an LBO. Regardless, this is definitely a stock to keep an eye on!

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Genesco Inc. (NTSE:GCO) shares rose $0.88, or 1.76%, to $50.86 today after the company rejected Foot Locker's $1.2 billion - or $46 per share - offer for the company. We first noted the possibility of this bid back in March, when GCO shares were trading at $42 per share. Chairman and CEO Hal Pennington said, "Our board unanimously rejected the proposal and concluded that it did not reflect the long-term value of Genesco, including its strong market position and future growth prospects." Interestingly, the CEO also commented on Foot Locker CEO Matthew Serra's comments stating that his company would be willing to pay $48 to $50 per share and were willing to go higher. Finally, Jefferies & Co. confirmed in a note to clients that Foot Locker can be a higher price and still see benefits from the deal. After all, the purchase would lower the company's reliance on Nike Inc., which currently supplies half of the shoes it sells.

So, is a deal still on the table? Well, clearly there is interest by the purchasing party and Genesco at least took the time to officially review the bid before rejecting it. These actions suggest that Foot Locker may come out with a higher bid for the company, perhaps above $50 per share ceiling that was mentioned. Clearly this is what shareholders are banking on as the company's share price approaches $51 per share! Whether or not this goes through remains to be seen; however, GCO is definitely a stock to watch in the meantime.

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Encore Capital Group, Inc. (NYSE:ECPG) shares $0.80, or 7.43%, to $11.56 in early trading after the company announced that an investor group agreed to take a 25% stake in the company. The investor syndicate consisting of J.C. Flowers & Co. and FPK Capital will acquire the shares through privately negotiated transactions and become the company's largest shareholder. Encore is expected to invite representatives from J.C. Flowers, FPK Capital and Red mountain to join its board next month while several existing board members will step down.

Investors see this new group as a welcome change to a board and management team that has driven the stock down from almost $15 a year ago to its current levels around $11. However, the investor syndicate's Schedule 13D filing with the SEC outlined no clear plans on how it plans to unlock shareholder value. Moreover, the company has already explored strategic alternatives back in June of last year and was unable to produce tangible results. Whether or not the new investor syndicate can help shareholders remains to be seen, but meanwhile this is definitely a stock to watch!

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Google Inc. (NDAQ:GOOG) reported first-quarter profits that surged on increased advertising revenue from its search segment, which continues to outperform rivals Yahoo and Microsoft. Total revenues rose 63% as the company announced its plans to expand into new products and types of advertising. This has resulted in increased spending, however, which rose from $336.6 billion in the fourth quarter to $596.9 billion in the first quarter of this year. Moreover, shareholders will have to deal with the $3.1 billion acquisition of DoubleClick earlier this month, although Google believes this will immediately begin adding to their bottom line.

In an interview CEO Eric Schmidt speculated that Google's growing efforts to broker advertisements that appear in newspapers, radio, and television would become a significant portion of their overall revenues starting in 2008. Many analysts have suggested that Google needs such a boost in order to sustain its momentum, as the company's rate of growth continues to slow. This quarter's 63% growth compares to 67% in the fourth quarter and 79% in the first quarter of 2006. But for now, the company's continued dominance in the search market (controlling 55.8% of all search queries) continues to keep investors happy. The question is: just how long?

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Griffin Land & Nurseries Inc. (NDAQ:GRIF) shares moved up marginally today after Mario Gabelli disclosed a 31.1% stake in the company and expressed his concerns that the company's share repurchase plan was not moving along quickly enough. Gabelli said that he realizes it's due to options exercised, but at a minimum the company should have bought enough shares back to offset the dilution. Moreover, he noted that the value of the company is materially above where the stock is selling, so he remains somewhat miffed at the glacial speed of the company's share repurchase. The letter also says that Gabelli "looks forward to discussing the notion of harvesting our real estate assets". What this means remains to be seen. Meanwhile, if the company meaningfully increases its share repurchase plan, it could mean significant value being returned to shareholders. This makes GRIF a stock worth watching!

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eSpeed Inc. (NDAQ:ESPD) shares moved down 7.66% today after the company released a statement saying that it sent a letter on April 19, 2007 to Terry Smith of Tullett Prebon plc stating that the board of directors has been formed by its controlling stockholder, Cantor Fitzgerald, that it is not interested in selling its controlling interest in the company to Tullett, in terminating its arrangements with eSpeed on terms proposed by Tullett in recent letters, or in proposing alternative terms to Tullett. More, the company said it is not in a position to pursue Tullett's acquisition proposal because such a proposal cannot be consummated without the consent of Cantor Fitzgerald - the company's controlling stockholder.

The company also commented on other demands made by activist shareholders. They stated that they cannot take any of the following actions without Cantor's express approval: (1) convert Cantor's Class B common shares into Class A common shares, (2) undertake any business combination with another entity, or (3) terminate the perpetual clearing, technology and other arrangements with Cantor and its affiliate BGC Partners. While the board is fully aware of its fudiciary duties, it has determined that it is unable to do anything without Cantor's approval. This leaves few alternatives for activist investors who continue to hold large stakes in the company, including WC Capital and Chapman Capital. They can put additional materials on the proxy, but with Cantor controlling the majority of the votes, it will be very difficult to make any meaningful changes. At this point, all shareholders can do is wait for a response from the hedge funds or perhaps another higher offer by Tullett that would be high enough for Cantor to consider.

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The Topps Company, Inc. (NDAQ:TOPP) shares moved up marginally beyond the company's buyout premium amid shareholder and director criticism over its merger agreement with Tornate at $9.75 per share. Today, board director and 6.4% stakeholder Arnaud Ajdler reiterated his beliefs in a March 14th letter that the existing proposed merger is not in the best interest of the company's stockholders because the per share merger consideration is wholly inadequate and does not provide full and fair value to the company's stockholders.

The board director also let shareholders know of a part of the story that nobody else outside of the board knew. First, Topps did not solicit comments from Timothy Brog, John Jones, or Ajdler (board members opposing the proposal) or make available to them drafts of the merger proxy before filing it with the SEC. Secondly, there was a third bidder for the company (Bidder C) that proposed a purchase price that was $1 per share more than the current offer, not contingent on financing, had the potential to be raised even higher since this company was a strategic buyer. Third, the board of directors opposed a share buyback or special dividend to instead opt for a sale, stating it would be the best way to maximize shareholder value. Yet, the most recent share buyback program that was approved by the board had a top price of $10.62 per share. How can management and the board recommend paying up to $10.62 per share, but then approve a merger for $9.75 saying that it maximizes value? Finally, the company did not adequately shop itself as it suggested in its press releases. The merger proxy indicates that it only approached three financial buyers before entering into a deal with Tornate. The statement also makes it clear that Topps never approached Bidder C - its main competitor that had expressed interest in the company even before the announcement of a transaction with Madison Dearborn and Tornante.

Overall, it appears as if the company's board has violated its fudiciary responsibilities by ignoring superior bids and failing to maximize shareholder value. With the current stock price trading above the buyout premium, it appears as if most investors are hoping that the merger will fall though and other bids will be examined. This makes TOPP a stock worth watching!

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