Sonesta International Hotels Corporation (NDAQ:SNSTA) shares rose $3.51, to 8.67%, to $44.00 today after Mercury Real Estate Partners disclosed a 9.8 percent stake in the company and expressed its belief that the company's shares are worth $110 to $125 per share. Shareholders are hoping that the company's willingness to explore strategic alternatives combined with the involvement of this activist hedge fund will lead to a substantial buyout in the near future.

Mercury Real Estate Partners supported their $110 to $125 per share valuation with an in-depth analysis presented in their Schedule 13D/A filing with the SEC. The company's largest asset is its partnership in Key Biscayne which is worth approximately $73.35 to $80.45 per share based on expected cash flows priced out at industry multiples. This value alone surpasses the current market price substantially.

The company also owns Royal Sonesta Boston, which is worth $23.24 to $28.65 per share based on the same type of analysis. Finally, the company also has other hotel interests amounting to $4 to $7 per share along with cash amounting to $5.77 per share. Subtract the combined value of these entities with the companies few liabilities and you can see how a value of $110 to $125 per share is realized.

Clearly, there is substantial value present in Sonesta that well surpasses the price the market has put on its shares. Now that the company has decided to explore its strategic alternatives, it it quite possible that it will be able to unlock this value in the near term. This makes SNSTA a stock worth watching!

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PDL BioPharma (NDAQ:PDLI) shares rose $0.49, or 1.92%, to $26.06 today after Daniel Loeb's Third Point disclosed a letter to the company's board once again calling for Mark McDade's termination and its support for a recent directive given to an investment bank to explore strategic alternatives. Many shareholders are hoping that the activist hedge fund will be able to clean up management and force the company to put itself up for sale to unlock value.

Third Point has been pushing for the termination of Chairman and CEO Mark McDade for several months now. The hedge fund contends that Mr. McDade (1) sabotaged a previous buyout offer, (2) moved the company's headquarters against the advice of his advisors at a cost of $100 million, (3) oversaw the loss of countless senior employees due to his incompetence, (4) consistently disappointed investors with poor earnings and delayed product launches, (5) failed to communicate with the analyst community to garner interest in the stock, and (6) committed several ethical violations according to former employees. All the evidence to back these claims are clearly laid out in their letter to the board.

Third Point made three recommendations to the company after meeting with them in June to discuss both Mr. McDade and the future of the company. First, the hedge fund demanded three of their own nominees be placed on the company's board. Secondly, they suggested that the company slow the progression of Ularitide and Nuvion Partnerships until all alternatives are considered. And finally, replace CEO McDade with a more competent executive that can help unlock shareholder value.

In the end, if the company heeds the hedge funds advice and decides to take action it could mean significant share appreciation for shareholders. Not only would McDade's removal pave the way towards a much more efficient company, but the strategic alternatives being explored could lead to a significant sale in the near term. This makes PDLI a stock worth watching!

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Ford Motors Company (NYSE:F) announced today that it is willing to consider offers for its Volvo car unit as it looks to raise more cash to fund its restructuring. The news comes shortly after the automaker completed the sale of its other luxury international brands that included Aston Martin, Jaguar and Land Rover. Shareholders are hoping that this additional cash will be enough to fund the automakers broad restructuring efforts aimed at returning it to profitability.

Management is banking on the proceeds from these sales to fund a broad restructuring effort aimed at reversing a $12 billion annual loss in 2006 by revitalizing its North American operations. The automaker already received a $26 billion financing package in 2006 which brought its total available liquidity up to $46 billion; however, many analysts have suggested that the company may need more to complete its restructuring efforts - hence the sale of its luxury brands.

Notably, the Volvo unit was pledged as part of the $26 billion financing package, so any offer would have to come at a substantial premium in order to justify surrendering such a large portion of its line of credit. This, however, did not stop the company from selling its previous luxury brands - so anything is a possibility.

In the end, Ford still faces many obstacles before it will be able to return to profitability. Clearly, any premium prices paid for its brands will help fund its restructuring and offers a great opportunity to consolidate its offerings. Combined, these factors make Ford a stock worth watching!

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