SunTrust Bank (NYSE:STI) shares moved up marginally after rumors surfaced that the company may become a takeover target for Citigroup (NYSE:C) who may be looking to increase its presence in Florida while increasing its profitability through cost savings. One banker noted that the company was in talks with a large bank while another said he would be surprised if the bank wasn't in talks with two to three other banks.

SunTrust has long been the target of takeover speculation, but never has Citigroup been mentioned as a potential candidate. Instead, many believed that Wells Fargo, JP Morgan, and PNC would be the most likely suitors. Citigroup is different from these players in that its assets are large but it has a relatively small branch presence and profitability. This would suggest that a SunTrust takeover would be make sense for the company to expand its footprint.

SunTrust CEO Jim Wells was quoted as saying that his company was exploring all options to help turn the company around. More, many analysts have suggested that Citigroup's organic growth has been slowing and it may be forced to pursue acquisitions in the U.S. markets. As for a price, many prior reports have thrown around $105 to $115 per share as likely buyout prices. And this makes STI a stock worth watching!

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CBRE Realty Finance (NYSE:CBF) shares dropped $1.21, or 19.48%, to $5.00 after the company announced disappointing second quarter results. The commercial real estate specialty finance company has been suffering amid the mortgage crisis, but appears to be substantially undervalued even given the risks that it faces.

CBRE announced that it was forced to write-down $7.8 million on one of two foreclosed assets but insists that the company is still trading more than 50% below its book value. The company's current assets include $211 million in CDOs, $75.8 million in Joint Venture Equity, $54.6 million in foreclosed assets, $72.9 million in warehouse lines, and $42.4 million in cash. If we subtract out $61.5 million in Trust Preferred Securities, we come up with a total net value of $395.7 million.

Based on the current market price, these assets are being priced a more than $205 million below their estimated book value. Even discounting the foreclosed assets division and some of the potentially-risky CDO's the company would still be undervalued! But in reality, the strong fundamentals in the commercial real estate market have many believing that the company is substantially undervalued. This makes CBF a stock worth watching!

NuCo2 Inc. (NDAQ:NUCO) shares rose $0.40, or 1.59%, to $25.63 after Shamrock Activist Value Fund disclosed a 5.66% stake in the company and recommended that it consider issuing a $7/share special dividend and institute a regular dividend of $0.25/share. The move caused a late-day rally that continued into after-hours pushing the stock price past $25.90.

Shamrock said that it believes the company's capital structure is sub-optimal and could support a substantial increase in long-term debt without compromising the company's ability to execute its business plan. Specifically, after considering a range of alternatives including, but not limited to, a further share repurchase, special dividend, and regular dividend, we recommend that the company utilize the strength of its balance sheet and strong cash flows to pay a dividend of $7.00 per share and institute an ongoing regular annual dividend of $0.25 per share. Achieving a debt financing package at attractive rates and terms should be achievable over the next 60 days."

In the end, the activist hedge fund feels that if the company believes it can achieve its business plan, they believe shareholders would be best off with a recapitalization of the company as proposed. Finally, Shamrock also requested a meeting with the board to discuss this proposal along with other measures that can be taken to unlock shareholder value. Combined, these factors make NUCO a stock worth watching!

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