aQuantive, Inc. (NDAQ:AQNT) shares jumped over 77% today after Microsoft Corporation (NDAQ:MSFT) agreed to purchase the company for about $6 billion, or $66.50 per share. The buyout price represents an amazing 85% premium over Thursday's $35.87 close!

The large offer reflects the increasing competition between the large Internet companies in the lucrative online advertising marketplace. Many investors pegged aQuantive or ValueClick as potential takeover candidates after Google's acquisition of DoubleClick and Yahoo's subsequent acquisition of Right Media.

These transactions leave ValueClick as the only remaining large independent advertising broker, which caused the shares to jump more than 7% despite an investigation into the company that was disclosed today. Some analysts see further consolidation, perhaps by Yahoo to further boost its offerings. Regardless, ValueClick and this entire industry are certainly worth watching!

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Pioneer Bankshares (OTC:PNBI) shares moved up marginally this week after Richard Spurzem disclosed a 5.2% stake in the company and a letter to the company's board of directors. The shareholder suggested that Virginia-based company has limited growth prospects and should put the company up for sale.

What evidence suggests that any sale would be successful? Well, the company operates Pioneer Banks in Virginia and may be attractive to any larger banks seeking to "fill out" their branch footprint in Central and Western Virginia. Moreover, the recent sale of Premier in the upper Shenendoah Valley I-81 corridor and Union Bank's purchase of six branches from Provident.

Mr. Spurzem had requested to meet with management several times and only recently received a response from the company indicating that they would speak with him after the company's next board meeting. Whether or not the company would be open to a possible sale or interested in engaging a financial advisor remains to be seen; however, this is definitely a stock to keep an eye on in the meantime.

Note: This is an OTC stock, meaning that it is not as liquid as many stocks traded on the NYSE, NASDAQ or AMEX. On the flip side, being an OTC company saves million in public company expenses which helps a company with a $24 million market cap.

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Midwest Air Group (AMEX:MEH) and AirTrans Holdings (NYSE:AAI) shares both rose more than 2% today as the companies prepare to battle during Midwest's upcoming annual shareholders meeting over a proposed hostile takeover. The fight promises to be an interesting one since the Wisconsin-based carrier faces strong shareholder support to the merger.

The company revealed today that 56.6% of the total outstanding shares were tendered in favor of the deal; however, they remain armed with a poison pill and a Wisconsin law that allows companies to consider not only shareholders but also all constituent interests when considering a merger. In the end, these ensure that no deal is possible without board support, and that will depend on AirTrans' success on June 14th.

Midwest has also made things complicated for AirTrans even if they do successfully take over the company. The carrier announced a partnership with Northwest today that will add 250 city pairs and more than 1,000 flight options for the customers of both airlines. These new routes will greatly expand routes for Midwest as an independent company but may end up conflicting with AirTrans routes while supporting their competition. Regardless, this is definitely a situation worth following...

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SunTrust Banks Inc. (NYSE:STI) shares continued their move up this week after the Wall Street Journal reported that the bank could become a buyout target now that it has shed its Coca Cola (NYSE:KO) holdings. The company had avoided such talks in the past using its KO holdings as a pseudo-poison pill, but now a sale of the eighth largest U.S. bank doesn't seem so distant from many analysts and investors.

Is there any evidence to support the theory? Well, according to the WSJ, executives at the company maintain that the company can keep going it alone, but outsiders say that evidence is mounting that selling out is an option being considered by directors. In fact, management announced Monday that it sees few acquisition opportunities. Instead, the proceeds of the KO sale will be used to fund a share buyback. Combined, these are all good indications that the company is keeping itself cheap, meaning that an acquisition is definitely not out of the cards. This is definitely a stock to watch!

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The New York Times Company (NYSE:NYT) moved down marginally today after reporting April sales 2.2 percent lower on weakness in all of its print media groups. Ad revenues dropped 3.6 percent from $203.4 million to $196 million while total revenues dropped from $303.2 million to $203.4 million. Analysts and investors continue to attribute the drop to an overall decline in the print advertising market as more and more users turn to online sources for their news and information.

This thesis is confirmed when we look at the company's internet sales, which climbed 15.6 percent in all three groups. Moreover, it's About.com segment saw its ad revenues soar 26.6% to $187.1 million. It is worth noting, however, that even these growth rates are much lower than other large web properties. The NYT has the 11th largest presence on the web and if it does not quickly act to extract more revenue and greater growth figures, it may fall behind in that arena too.

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Riviera Holdings (AMEX:RIV) shares jumped earlier this week after the Las Vegas-based company announced that it had began to receive bids in connection with its sale process. The process comes after activist shareholders had pressured the company via a proxy solicitation to take actions to unlock shareholder value.

Currently, a $30 per share offer from a group led by Ian Bruce Eichner and Dune Capital Management is the best bid but there are many other potential bidders. In fact, Flag Luxury - the hedge fund that previously pushed for a sale - said yesterday that their group is currently considering all of its options, which may include making a higher offer than the $30 per share expression of interest that the board announced on May 11th.

Many shareholders are hoping that Flag Luxury will utilize their existing position as largest shareholder as leverage to make a higher bid for the company. Ideally, this could spark a bidding war that could propel the stock significantly higher than $30 per share. And given the M&A in the gaming sector by private equity not so long ago, this may be a strong possibility. Regardless, this is certainly a stock worth keeping an eye on!

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Feldman Mall Properties (NYSE:FMP) shares rose $0.21, or 1.87%, to $11.29 today after Mercury Real Estate Advisors disclosed a 9.5% stake in the company and demanded that the company immediately engage a financial advisor to assist the board in putting the company up for sale.

The Connecticut-based hedge fund insisted that the company continues to trade at a deep discount to its liquidation value, which is being eroded by an ineffective management team that has delivered a total return of only 1.9% for shareholders since the company's IPO. Moreover, the company's G&A expenses are far too high a percentage of revenues to justify the company remaining public - that is to say, significant cost savings could be achieved by any buyer simply by taking the company private or leveraging economies of scale.

Mercury also noted that the company has failed repeatedly to meet routine SEC reporting timetables, repeatedly disappointed on earnings and cash flow projections and recently completed a dilutive financing. These failures are especially embarrassing given the company's relatively straightforward business operations, which entail owning a mere seven retail properties! Consequently, the hedge fund requested a meeting with the board of directors to discuss this dire situation and recommend that the company hire and investment banker to explore a possible sale of the company.

Unfortunately, the board of directors has not been so open to these suggestions to date. In fact, this is the third time that Mercury has sent a letter to the board of directors via a Schedule 13D filing - the other two times being in January and March. Apparently, the company's board and management are more concerned about protecting their own jobs than unlocking value for shareholders - a stance which is not uncommon in today's world. Mercury may be forced to threaten a proxy fight or take further action before any kind of a response can be solicited from the company or board. Regardless, this is definitely a stock to keep an eye on as any sale would come at a substantial premium to the current market price!

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SunTrust Banks (NYSE:STI) shares dropped over one percent today after the company announced several initiatives to enhance shareholder value, concluding its process of exploring various "value initiatives". These initiatives are focused in three areas: efficiency and productivity, SunTrust's ownership of Coca-Cola common stock and capital optimization/balance sheet management.

SunTrust's primary objective is to sell its stake in Coca-Cola, which is one of the largest components of its portfolio. The company then plans to use that money to repurchase $750 million to $1 billion of their own stock during the rest of 2007. Through a combination of its previously announced 20% dividend increase and anticipated share repurchases, the company expects to return over 90% of its earnings to shareholders in 2007!

SunTrust also expects its cost cutting efforts to result in an annual gross cost savings for 2009 of $530 million - nearly 50% greater than its original estimates. Additional efficiency and productivity improvements may also make their way to the company's bottom line by 2009.

While many shareholders were clearly hoping that this process would result in a sale of the company (that's why its down today), 90% of earnings being returned to shareholders is certainly nothing to complain about! STI is a stock worth watching closely over the next year as they begin to execute their plan...

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Ceridian Corporation (NYSE:CEN) shares moved down marginally today after the company said it fired Comdata executive Gary Krow for disclosing confidential information to activist hedge fund Pershing Square. Ceridian said it learned about the violation through testimony in the company's lawsuit with the hedge fund, but Pershing Square continues to insist that it did not receive any confidential information concerning the company or its affiliates.

Gary Krow wasn't the only executive fired either - just a few months earlier the company terminated CFO Doug Neve. Interestingly, both of these executives hand delivered written letters to the company's board criticizing senior management. Shortly after these letters were received, Chairman and CEO Ronald Turner announced his resignation. Meanwhile, almost all of these key positions were filled with ex-GE employees - a troubling trend among management and the board.

This mysterious series of events prompted Pershing Square to sue the company in an effort to obtain these letters to management. The letters could not only provide very material information that shareholders deserve, but also information that could be used in a potential proxy solicitation if the hedge fund decides to try and replace the board. Unfortunately, the courts ruled on Friday in favor of Ceridian. Apparently, owners do not have the right to view management conversations...

Pershing Square was initially just seeking a spin-off to unlock value in the company's Comdata division and prevent an acquisition-based strategy, but their involvement has since brought to light an apparent host of other problems with the company's board and management. The secretive letters not only prompted the resignation of the company's CEO, but also spawned a probe by the SEC into the company's ethics policies.

Finally, to compound the problems at Ceridian, the company failed yet again to set a record or meeting date for the annual shareholders meeting, which makes it impossible for shareholders to express their views and make changes to the company they own. When the date is finally set, the company will be in for a fight. Pershing Square reportedly obtained documents from Krow outlining lists of shareholders that would support him and his goals to spin-off Comdata. Combined, these factors make CEN a stock worth watching!

For more information on the lawsuit and ethical issues, see Nashville Post's article on the subject.

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Mylan Laboratories (NYSE:MYL) shares fell over 11% today after the company agreed to pay $6.6 billion for the generic-drugs unit of Merck KGaA. The acquisition will create a leading global generic drug manufacturer with combined revenues of $4.2 billion in 2006 and 10,000 employees.

Strong competition and tight profit margins in the generic drug industry has forced a wave of consolidation in the sector. Mylan had been trying to find a new target after its failed bid to acquire King Pharmaceuticals in 2005 thanks to Carl Icahn's intervention. Meanwhile, Merck KGaA was the world's #3 generics business by revenue in 2006 and makes a great strategic fit with the company for the long-term.

Many analysts and shareholders questioned the wisdom behind the acquisition. Analysts were surprised by the large bid, which came in at the top of most estimated ranges, while shareholders were distraught by the massive dilution and long payoff time-frame. The $6.6 billion mega-merger is expected to be dilutive to earnings in the first year, earnings neutral in the second year and finally positive in the third year.

Overall, the merger will combine two great generic drug companies to create a market leader. While this process clearly resulted in some short-term pain, many investors are banking on the long-term picture to provide ample returns long into the future. Either way, this is a stock that is definitely worth watching!

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