Angelica Corporation (NYSE:AGL) may face more heat from Pirate Capital's Thomas Hudson after the activist hedge fund disclosed a 9.8% stake and expressed strong disappointment with the company's operating results. The Chesterfield, MO-based company recently posted a first quarter loss of $1.14 million on revenues of $107.8 million compared to a loss of $1.5 million on $107 million during the same period last year.

The largest concern that many shareholders have is the disconnect between the intrinsic value of the company and the current market valuation of its shares. Specifically, many are concerned that the aggregate price of Angelica's 11 bolt-on acquisitions between 2003 and 2006 is substantially higher than the value that the market currently assigns to these assets. The company ended up paying 1x sales while the company remains valued at just 0.5x sales. Clearly this is a problem with either the market's mis-valuation or management's recklessness.

Pirate Capital is a well-known activist hedge fund but had some troubles in the past when lackluster returns led to multiple limited partners pulling their money out of the fund. The hedge fund is now trying to turn itself around, however, amid a healthy M&A market that has seen more deals than ever before. While Pirate Capital never indicated that they were specifically seeking a sale, the hedge fund did say that they would actively pursue strategic alternatives. Combined, these factors make AGL a stock worth watching!

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Borders Group (NYSE:BGP) may soon become an activist target after Spencer Capital disclosed a 6.8% stake in the company along with communications it had with management. The investment management firm disclosed in a Schedule 13D filing with the SEC conversations that it had with the company's Chief Financial Officer while announcing its intent to have further discussions with the company's management and board of directors.

The books, music and movies superstore chain was also targeted not long ago by Bill Ackman's Pershing Square - an activist hedge fund that also owns a large stake in Barnes and Noble (NYSE:BKS). There was speculation that the famous investor may be interested in merging the two competitors in an effort to strengthen their position against key competitors like Amazon.com (NDAQ:AMZN).

The involvement of another activist shareholder reignited hopes that the company may be exploring a merger or other strategic transaction aimed at unlocking shareholder value. But just how far fetched is this idea? Well, the company has already seen interest from Pacific Equity Partners - a private equity firm that expressed interest in the Australian unit of the company. If there are other interested buyers, BGP could see itself split-up and sold at a substantial premium to the current market price. Combined, these factors make BGP a stock worth watching!

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Google Inc. (NDAQ:GOOG) shares received a boost today after the company announced the acquisition of Postini Inc. - a privately held email security money - for $625 million in cash. The move gives Google access to the lucrative market with 35,000 businesses and over 10 million users.

Postini provides security, archiving and encryption products used to protect email, instant messages and other web-based communications. These products have becoming increasingly popular during the past few years as more and more critical business data gets transferred through these channels. Postini is one of the largest companies operating in the sector.

Google made the acquisition in hopes to expand its hosted businesses which are included in its Google Apps lineup. The company claims that over 1,000 businesses are signing up for its Apps products daily, but larger businesses have been reluctant so far to lean away from MS Office. The acquisition of Postini should enable the company to move into these new markets.

The acquisition follows Google's recent strategy to diversify its revenues away from its existing Adsense and Adwords programs as investors remained concerned about its long-term growth prospects. The company's most publicized purchase was a multi-billion dollar deal for DoubleClick Inc. which it hopes will help it to move into the CPM-based banner advertising market. The purchase of Postini should help the company expand its revenues even further into the lucrative business applications market. Combined, these factors make GOOG a stock worth watching!

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