Angelica Corporation (NYSE:AGL) shares rose $0.24, or 1.08%, to $22.44 today after the company responded to Pirate Capital's request for the company to explore strategic alternatives. The news comes after the activist hedge fund pushed for the company to put itself up for sale in order to unlock shareholder value.

The textile rental company announced that it has already hired Morgan, Joseph & Co. to explore strategic options including a sale. As a result, the company requested that Pirate Capital immediately remove its proposal from the company's next proxy statement or it would request that the SEC allow it be removed due to redundancy.

Pirate Capital responded today, however, by saying that it had requested a nationally recognized investment bank to explore options - not a small firm that  has pre-existing connections with the company. The activist hedge fund noted that Joseph Morgan has been involved with the company for more than 17 months now and nothing has been accomplished. Shareholders are not simply looking for more analysis; rather, they are looking for an investment bank that is willing to search for strategic alternatives to help unlock shareholder value.

In the end, Pirate Capital and many other investors remain unsatisfied with the company. In fact, the hedge fund threatened to take action by nominating its own candidates to the company's board of directors. Investors must now wait and see how the company will respond to see what the odds look like for a possible sale of the company. This makes AGL a stock worth watching!

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Alfa Corporation (NDAQ:ALFA) shares rose $3.19, or 20.99%, to $18.39 today after it made an offer to take the company private at $17.60 per share in cash. The company subsequently announced that it has formed a special committee of the board to evaluate the offer and make an official recommendation. Shareholders are clearly banking on an increased buyout offer as shares are trading well above the buyout premium.

Alfa Corporation proposed this going private transaction in order to better compete in the personal lines insurance industry over the long-term by increasing their investment in technology and accelerating the development of their distribution channels. These objectives are best accomplished through a private, more nimble corporate structure. Finally, they believe that their current offer represents an attractive price in an increasingly uncertain environment.

Alfa Corporation has been struggling recently after its credit rating was downgraded to "A+" and earnings failed to impress. As a result, Alfa stock was trading near its 52-week low of $14.99 - and well off its 52-week high of $19.95 - before today's buyout offer. This put many current shareholders underwater in their investment, even at $17.60, which could explain why they appear to be looking for more.

It is uncertain as to whether or not the company will consider raising the buyout offer. Unfortunately, the board is likely to approve the transaction despite the somewhat low price which will make it difficult to seek a higher offer. More, the buyout entity disclosed a 43% stake in the company and indicated that they would not sell their shares to any other entity. This makes the possibility of other bidders making offers highly unlikely. In the end, unless the board finds that they offer is too low or unless a shareholder rights group gets involved, it is unlikely that a higher offer will be realized. However, this is definitely a situation worth watching.

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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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