Alcatel-Lucent (NYSE:ALU) shares rose $0.38, or 2.78%, to $14.04 today after the company indicated that its restructuring efforts remained on track. The telecom equipment company announced an improving order book following an intense effort in the first quarter to bring clarity to the company's sales force and customer base. The news follows the company's merger disruptions and costs.

Douglas McIntyre at 24/7 Wall St. also suggested that the company could be a takeover target for Motorola or Nortel. Why? Well, these new numbers suggest that ALU is either taking business from these two rivals or the telecom equipment sector is improving. Even if the latter is happening, any acquisition would take some pressure off of MOT management to improve their handset business. While this is a possibility, there is no reason to believe it would happen at this point.

Overall, the Alcatel-Lucent is a company that is quickly recovering through its restructuring efforts. Meanwhile, its telecom equipment industry appears to be improving which should also help the company's margins and growth. Combined, these factors make ALU a stock to watch over the next few months!

Related Companies
Nokia Corporation (NOK)
Nortel Networks (NT)
Cisco Systems (CSCO)

PDL BioPharma (NDAQ:PLDI) may face more shareholder scrutiny after activist hedge fund Third Point blasted L. Patrick Gage's response to their previous letter and expressed their concerns over the company's "woefully unsatisfactory" answers to the hedge fund's questions during a conference call on the same day. Moreover, the hedge fund's continuing investigation into the company's management and board members have uncovered more serious issues that must be addressed.

Third Point first contacted the company two weeks ago (read article) and demanded that the company (1) terminate Mark McDade's employment as CEO, (2) add three shareholder representatives to the company's board and (3) retain an investment bank to explore strategic alternatives. Moreover, based on their continuing investigation, they now also demand that the company remove Mr. Gage and Jeanmarie Guenot from their positions within the company.

Third Point has uncovered several ethical problems within the company's board and management that must be addressed in order to ensure that the company can move forward unencumbered with ineffective and/or detrimental management. These problems were uncovered during interviews with dozens of ex-employees, industry peers, industry analysts and former employers of key management personnel that are being investigated.

The hedge fund's investigations began with Mr. McDade, who has reportedly committed several ethical violations by putting his own interests ahead of the company's interests. Subsequently, the hedge fund discovered that the circumstances surrounding Jeanmarie's rise up the corporate ladder are also plagued with ethical violations. These two key personnel have led to key scientific personnel leaving the company and an ever-expanding list of expenses. Combined, these factors are significantly affecting shareholder value.

The company responded by saying that Third Point's issues with the board and management would be discussed with the entire board, who would then make a decision on behalf of shareholders. However, the hedge fund is now concerned that Mr. McDade and Dr. Gage (the CEO and Chairman) are not accurately conveying the hedge fund's concerns to the board; rather, they are helping eachother remain in power by hiding the story from the other half of the board.

Third Point contends that these issues can only be solved by ridding the board and management personnel that are causing the problems, strengthening the board with additional shareholder representation and hiring an investment bank to help the company explore strategic alternatives to assist shareholders in unlocking the value concealed for so long by management. Whether or not this materializes remains to be seen, but this fight is definitely one to keep an eye on!

Related Companies
Genetech (DNA)
The Medicines Company (MDCO)
Medarex (MEDX)

Cadbury Schweppes' (NYSE:CSG) U.S. beverages business may receive significant interest from twelve private equity firms, according to an article in the Wall Street Journal. The first major group of contenders consists of Blackstone, KKR and Lion Capital while the second is composed of Bain Capital, Texas Pacific and Thomas Lee. It is uncertain whether the other six firms interested are considering joining a consortium or plan on placing individual bids.

Cadbury expects the beverages division to draw more than 8 billion that it would return to shareholders via a share buyback or special dividend. The move would unlock significant value but would not preclude the company from making acquisitions of its own, as the company has a strong balance sheet and could easily raise an additional 10 billion if needed.

Cadbury, without its beverages division, would be the largest confectionery group in the world and could work to increase its already-dominant position. This is good news for the long run, but may hurt the share price in the short term depending on the terms of any acquisitions. Consequently, this deal could turn out to be a mixed bag for shareholders in the short term.

While the company was quick to note that the decision to put the division up for sale has not been officially announced, CSG is definitely a stock to keep an eye on given the significant interest by private equity!

Related Companies
The Coca-Cola Company (KO)
The Hershey Company (HSY)
PepsiCo Inc. (PEP)

Texas Pacific Land Trust (NYSE:TPL) shares opened even today after Mercury Real Estate Advisors disclosed an 8.1% stake in the company along with a letter to the board of directors in a Schedule 13D/A filing with the SEC. The Connecticut-based hedge fund asked that the company increase its buyback program and split its sub-shares on a further 10 for 1 basis in order to further unlock value for shareholders.

Mercury expressed their disappointment that the company only repurchased 3,800 shares in the first quarter of 2007 - a number that pales in comparison to the company's 9,000 share quarterly average between 2005 and 2006. This fact is especially disturbing given the fact that the company has $8 million in cash, $2 million in quarterly profits, and notes receivable of over $20 million. Spending only $6 million of this cash would result in over 28,000 shares repurchased!

Mercury also expressed their concern over the TPL's high share price. The stock is currently trading at $209 and has reached a high of $249 earlier this year. The hedge fund believes that the company should split the stock on a 10 for 1 basis to bring the shares to a more affordable $22 to $25 range. This would result in greater liquidity, which would be beneficial for all shareholders.

Overall, Mercury is confident in the company's overall business plan and valuable assets but believes that the stock price could be supported through these two measures. If the company institutes these changes, it could significantly enhance value. This makes TPL a stock worth watching!

Related Companies
Permian Basin Royalty Trust (PBT)
Sabine Royalty Trust (SBR)

Dendreon Corporation (NDAQ:DNDN) shares moved up $0.27, or 4.42%, to $6.34 today after the company announced new study data on Provenge at the American Urological Association on Sunday. The company's board also agreed to layoff 40 workers in an effort to reduce its cash burn rate while it works towards FDA approval. The news comes after an extremely volatile couple of months for the company, whose shares ranged between $3.57 and $25.25.

The new study data on Provenge was disclosed in the abstract "Advanced Prostate Cancer Patients who Receive Sipuleuc-T followed by Docetaxel Have Prolonged Survival" authored by Daniel Petrylak, MD. According to Petrylak, the results of the 82-patient study have suggested that the use of Provenge as a first-line treatment followed by chemotherapy docetaxel upon disease progression may provide patients with substantially prolonged survival benefits.

Dendreon also has strong support from patients who have begun lobbying the FDA to get Provenge approved. In fact, a small group of prostate cancer patients are meeting the FDA Commissioner during the next few months to discuss the matter. Meanwhile, they have setup ProvengeNow.org in an effort to attract further interest from patients to help their cause.

Many doctors that attended the American Urological Association's meeting today (during which Provenge was supposed to be launched) also indicated their disappointment. Many of their patients had been anticipating the new drug and were extremely disappointed when the FDA decided to delay their ruling by several months to a year. Whether or not any of these efforts materialize in the form of a quicker approval remains to be seen; however, DNDN is definitely a stock with great upside potential once Provenge hits the market. Combined, these factors make DNDN a stock worth watching!

Related Companies
Cell Genesys, Inc. (CEGE)
AVI BioPharma, Inc. (AVII)
MannKind Corporation (MNKD)

Alltel Corporation (NYSE:AT) shares moved up $4.70, or 7.21%, to $69.91 today after the company received a $27.5 billion buyout offer from TPG Capital and Goldman Sachs Capital Partners. The $71.50 buyout comes after speculation that we recently noted in our article All Eyes on an Alltel Buyout. The premium represents a 9.6% premium to Friday's close and a 23% premium to the stock's price before buyout speculation first began in late December.

This price is likely to be viewed by shareholders as too low given the high premiums seen in other recent buyouts. Over the last six months, Alltel shares are up 15% while competitors Verizon and AT&T moved up 20% and 25%, respectively. In fact, even after the buyout Alltel shares will only be up 4% over the past 52 weeks! And finally, Alltel's strong cash flows and unique market position give it a very competitive stance as the 5th largest wireless provider in the United States.

So, is the buyout too small? Well, it is worth noting that Alltel's valuation before the buyout rumors was already significantly higher than its peers. The company's PEG (PE/Growth) ratio stands at a high 2.90 while it trades at just about enterprise value. In the end, it is uncertain whether or not the company will receive a higher bid, but AT is definitely a stock to watch in the meantime!

Related Companies
AT&T, Inc. (T)
Bell South (BLS)
CT Communications (CTCI)

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!

Related Companies
ValueClick Inc. (VCLK)
Aptimus Inc. (APTM)
24/7 Real Media (TFSM)

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.

Related Companies
BB&T (BBT)
Premier Community Bankshares (PREM)

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...

Related Companies
AMR Corporation (AMR)
Southwest Airlines (LUV)
SkyWest (SKYW)

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!

Related Companies
Regions Financial Corporation (RF)
Wachovia Corporation (WB)
BB&T Corporation (BBT)