NTN Buzztime (AMEX:NTN) shares moved up $0.08, or 9.28%, to $0.94 today after Trinad Capital disclosed a 6.6% stake and expressed its concern about the company's future. The activist hedge fund demanded that the chairman of the board be removed, new members be installed and strategic alternatives be explored. Shareholders clearly applauded this move with the stock rising nearly ten percent.

NTN Buzztime provides both entertainment and hospitality services to bars and restaurants. The company's main products include the interactive video games that allow competition between bars and restaurants throughout the United States. Buzztime also develops guest and server paging systems to enhance customer service at bars and restaurants. The company's stock has declined over 30 percent so far this year amid weaker than expected earnings and profitability forecasts.

Trinad is extremely concerned about several recent changes that the board made to the company's bylaws that appear to entrench current management and board members while impairing shareholder value. Among other things, the bylaws now prohibit shareholders from calling a special meeting and imposed advance notice requirements for shareholders wishing to nominate new members to the board! Obviously, these provisions would need to be removed in order to open the doors to any potential strategic transaction to unlock shareholder value.

Fundamentally, the company has been struggling with worsening margins yet has managed to increase its cash substantially. This leaves the door open to an internal move like a share buyback or special dividend or external acquisition where the buyer could utilize the cash to collateralize a loan in a leveraged buyout. Clearly, the company is concerned about this cash as it could be the reason for the new borderline poison pill requirements imposed on shareholders wishing to take action. Regardless, this is certainly a great company to watch!

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Lancaster Colony's (NYSE:LANC) largest shareholder, Barington Capital, stepped up pressure on the company yesterday, demanding that they turn over their books and records for analysis. The move comes amid depressed earnings and increasingly poor corporate governance practices that has many guessing. Shareholders are hoping that these efforts could push the board to take action.

Lancaster Colony is a diversified manufacturer and marketer of consumer products, including specialty foods for the retail and foodservice markets, glassware and candles for the retail, floral, industrial and foodservices markets, and automotive accessories for original equipment manufacturers and aftermarket - although the company recently sold the assets of this last division. Financially, the company has been struggling with profitability. Despite decent revenue growth last quarter, their earnings fell on lower margins.

Barington had contacted the company in the past expressing disappointment with these profitability and share price performance concerns. Moreover, the activist hedge fund complained that the company is controlled too heavily by its founding Gerlach family after several anti-takeover defenses were installed to protect incumbent management and board members.

In the end, shareholders are hoping that Barington can help transform the company from a family-controlled operation to one that is more accountable to shareholders. Barington has a long successful track record in this arena, but it may take some time for them to break through several poison pills and a suborn family that owns the majority of the company's stock. Regardless, this is definitely a stock to watch!

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Transocean (NYSE:RIG) shares moved up $6.45, or 5.87%, to $116.42 today after the company announced the acquisition of GlobalSantaFe for nearly $18 billion. The combined company will have a global fleet of 146 rigs worth an estimated $53 billion. Shareholders in both companies applauded the deal that will greatly expand their offshore drilling services.

Transocean stands to gain substantially from the transaction in terms of both increased scale and cost savings. The company expects to realize cost savings of $100 to $150 million a year by 2010 - that's a million dollars per rig per year! The additional rigs should also help the company with its extensive backlog while a proposed recapitalization will fund a buyback and other measures to increase shareholder value.

Interestingly, the deal took place at no premium and resulted in the stocks of both companies rising - a rare occurrence in M&A deals. This happened because the deal was structured to give shareholders in both companies a total of $15 billion in cash dividends collateralized by a combined $33 billion in backlogs. Essentially, the company underwent a leveraged recapitalization that enabled it to buy GlobalSantaFe at a substantial discount while also improving the company's capital structure.

Overall, this deal is exactly what shareholders were hoping for - a cheap acquisition with a way for them to cash in on Transocean's massive backlog. The transaction should also help improve the company's financial position and improve their future outlook. This makes RIG a stock worth watching!

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American Standard Companies Inc. (NYSE:ASD) announced last week that its spin-off of WABCO Holdings Inc. (NYSE:WBC) is set to take place on July 31st. Under the terms of the deal, shareholders are American Standard on record July 12th will receive one share of WBC for every three shares of ASD that they own. Investors and shareholders should watch this spin-off as it presents several opportunities to profit that we will explore in this article.

WABCO is a leading provider of technologically advanced breaking, stability, suspension and transmission control systems that has been around since 1869. Their products include a range of control systems that improve vehicle safety and reduce overall vehicle operating costs for the world's leading truck, trailer and bus manufacturers as well as select passenger car manufacturers. The company's strong competitive and financial condition make it a great stock to own.

Investors may find it worth noting that spin-offs in general tend to outperform the overall market during their first couple of years as an independent public company (just check out this article by the Journal of Investment Management). The reasoning behind this is simply that many people who receive the shares do not want them so they immediately turn around and sell - creating a discount.

The company is also much more nimble, being independent from its parent, and therefore may be able to increase its revenues and cut costs. It is also worth nothing that insiders are often given a high stake in the new spin-off, which provides them incentive to jump the stock price. We already know that WABCO is an excellent candidate with management's sizable stake in the company with a leading market position.

In the end, investors should carefully watch this stock after its July 31st spin-off while existing shareholders should consider holding onto their shares for awhile. Evidence has shown that spin-offs do tend to outperform the market in certain instances - and WABCO appears to be a poster child for these cases. This makes WBC a stock worth watching over the next year!

UBS AG (NYSE:UBS) has been facing a sort of midlife crisis lately just after new chief executive Marcel Rohner took the reins and promised to keep the current strategic direction of the company intact. The company has been experiencing problems with its investment bankers that some are speculating could result in a spin-off or sale of the division, which would transform the company into an asset management pure play.

The financial services company's problems with its investment bankers stem from a blowup of a hedge fund within the company that eventually led to ex-CEO Peter Wuffli and several high profile bankers leaving the company. Putting the ex-head of the wealth management and private banking segment in charge after didn't help much either. In the end, the whole ordeal is casting serious doubt as to whether or not UBS can retain its best investment bankers with what has become a second-rate program.

Meanwhile, any spin-off or sale would be welcome news for shareholders and investors who are well aware that an asset management pure play UBS could fetch a multiple of 20x while investment banking typically only trades at 10x. It is also worth noting that UBS's asset management business produces a full 25 percent more each year in profit than its investment banking business.

Specifically, many shareholders and investors are hoping for a sale of the investment banking division (with the proceeds returned to shareholders via a buyback or special dividend) which would result in the 20x multiple pure play. This would solve both the company's internal problems with their investment bankers along with valuation issues they face by providing two services that trade at such varied multiples. Whether or not this materializes remains to be seen; however, UBS is definitely a stock to keep an eye on!

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Reddy Ice Holdings (NYSE:FRZ) shares moved up $0.07, or 0.23%, to $31.01 today after the Shamrock Activist Value Fund disclosed another letter challenging the board to reconsider a planned buyout by GSO Capital Partners. The activist hedge fund continues to oppose the transaction, calling it grossly inadequate, and has finally garnered some support.

The packaged ice distributor announced the $1.1 billion - or $31.25 per share - buyout deal with GSO Capital in early July and immediately drew shareholder criticism. Regardless, the company quickly moved to approve the transaction which is set to close in the fourth quarter. Many shareholders are concerned that management buyout bonuses and other incentives may be clouding the board's judgment at the expense of shareholders.

The Shamrock Activist Value Fund announced today another interesting piece to the story. The hedge fund uncovered the fact that the company appears to be abandoning its duty to maximize shareholder value by minimizing opposition to the buyout bid. This is being done by encouraging certain large shareholders to speak directly with GSO Capital about rolling their FRZ shares into the GSO leveraged buyout transaction instead of tendering them for cash. Clearly, this is unfair to smaller shareholders that represent the majority ownership in the company!

Shamrock insists that the company should immediate abandon the proposed buyout transaction and instead institute a share buyback at $33 per share to allow apathetic shareholders to exit the stock while allowing existing shareholders to retain their stake. The current game management is playing of "buying off" support for the transaction is simply unfair and unethical - a clear breach of the board's duty to serve shareholders as a whole. While Shamrock still faces an uphill battle, this is definitely a story worth following!

The second times a charm for Dice Holdings (NYSE:DHX) who went public again yesterday after emerging from its 2004 bankruptcy. The website operator raised $217 million after it priced at $13/share - the top of its expected range. The IPO was especially rewarding for the company's two private equity backers, General Atlantic and Quatrangle Group, who stand to make roughly 2.7x their money in two years. Meanwhile, some investors remain skeptical as to the long-term viability of the company.

Dice Holdings initially went public back in 1998 at the peak of the dot-com boom only to end up in bankruptcy courts five years later. Since then the company has improved substantially with $83.7 million in revenues in 2006 compared to $32.2 million in 2004. The company plans to use the proceeds from its second more successful IPO to pay off more than $190 million in debt and fund general business expenses.

The real story, however, is in the private equity funds that successfully executed a bankruptcy play. The two funds formed Dice Holdings in August of 2005 and bought the company for pennies on the dollar - $138.6 million. Amazingly, they recouped most of this cost in a $107.9 million dividend payout in March. This means they are still holding shares at an adjusted purchase price of just over $18 million, putting their cost per share at around 40 cents! Perhaps this is something to consider the next time a private equity fund makes a bid for one of your stocks that seems to be underperforming in the short-term...

In the end, the long-term viability of Dice remains uncertain as their primary business is in their employment portal, Dice.com. Ideally, the company will be able to use these proceeds to pay off its debts and build itself into a cash cow that may be attractive to other larger employment portals like Monster.com (NDAQ:MNST) or even some technology-related newspapers. Combined, these factors make DHX a stock worth watching!

It's not often that an activist hedge fund pressures a company not to sell, but Gemstar TV Guide International (NDAQ:GMST) appears to be the exception to the rule! Citadel Equity Fund, the company's largest shareholder, noted in a letter to the board that they fully support the company's board and management but caution that their recent decision to explore strategic alternatives may be  in error given the company's unique market position and strong prospects for the future.

Citadel believes that Gemstar is uniquely positioned at the nexus of exciting changes taking place in video entertainment consumption, including the transition from analog to digital distribution, new platform developments (IPTV, broadband and mobile), and significant opportunity to monetize hundreds of billions of impressions garnered each year on IPG (interactive program guide) through both advertising (display and search) and transaction based services.

Despite the company's strong position in this arena, the hedge fund insists that the company's stock fails to reflect (1) the current improved state of Gemstar's operations or (2) the opportunity for independent value creation over the next several years as an increasing number of platforms take advantage of Gemstar's unique intellectual property. While the hedge fund commends the board's decision to explore options, it does not believe any bids will be made that reflect the billions of dollars of incremental equity value that could be realized over the next few years.

Citadel is one of the world's largest hedge funds with its flagship funds returning nearly 30 percent per year. It was also the first hedge fund to go public to raise funds and allow owners to cash in on their stake. Given their strong equity performance and extreme confidence in management (so much so that they would forgo an immediate premium), we have good reason to add GMST to our stocks worth watching!

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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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