A large Bioenvision, Inc. (NDAQ:BIVN) shareholder announced its opposition to the company's proposed $5.60/share buyout amid yet another solid earnings report, according to a Schedule 13D/A filing with the SEC. The move follows the lead of many other shareholders who are expected to collectively reject the bid next month.

SCO Capital Partners disclosed a 13.1 percent stake in Biovision along with a letter to the company's board of directors that called the proposed $5.60/share offer "extremely inadequate" and the result of a "poorly managed and ill-timed" sale process. The hedge fund insists that the company could fetch closer to $10/share in a competitive auction or sales process in 2008.

"We reiterate, as another shareholder has recently done publicly, that SCO will not vote for the Genzyme transaction at the current offer price," said fund manager Steven Rouhandeh in a statement. "In the alternative, SCO believes that the Bioenvision board of directors should be working on behalf of the common shareholders, like SCO, to maximize value for all shareholders."

SCO's plan for Biovision includes several components. First, the hedge fund intends to propose a new slate of directors at the next annual meeting. Secondly, the hedge fund believes that the company should retain key employees while seeking to augment management with new talent. Finally, the hedge fund wants to seek global control of Genzyme and seek a future exit through a competitive auction or sales process.

In the end, shareholders are fairly certain that Biovision's merger proposal will fall through (we can see this priced in now). Whether or not the company takes action to unlock value in other ways remains to be seen, but with a large shareholder like SCO backing new proposals, BIVN is a stock worth watching!

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Twin Disc (NYSE:TWIN) said today in an 8-K filing with the SEC that a sale of the company would not be in the best interest of its shareholders in response to a hostile Schedule 13D filing by an activist hedge fund that demanded a sale of the power equipment manufacturer.

Clarus Capital Group Management disclosed a 5.1 percent stake and a letter to the company requesting that the Board of Directors immediately retain a prominent investment bank to explore various alternatives for enhancing shareholder value, including a more aggressive stock buyback and an outright sale of all or part of the company.

"For some time we have been concerned that Twin is a publicly traded company that is largely run as a privately held company," said fund manager Ephraim Fields. "Twin has an overcapitalized and suboptimal balance sheet, an illiquid stock, no sell-side equity analyst coverage, and an unresponsive Board."

Many shareholders are hoping that Twin Disc will take the advice and take action to unlock value. Studies have shown that activist targets have outperformed the overall market when the companies take the recommended actions - an increased buyback or spin-off could unlock substantial value. However, in some cases activist goals can be overly focused on the short-term and hurt long-term growth and objectives.

According to a company statement today, "[We do not believe] incurring debt in order to satisfy the short-term objectives of certain investors was consistent with its long-term interests."

It is not clear how set Claris is on forcing a deal - some activist hedge funds go so far as launching proxy contests to get their proposals enforced. This situation definitely makes TWIN a stock worth watching!

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Nabi Biopharmaceuticals (NDAQ:NABI) announced today that it has agreed to sell its Nabi Biologics division for German drugmaker Biotest AG for $185 million, according to an 8-K filing with the SEC. The move marks a successful start to the company's strategic alternatives process initiated from activist investor Robert Chapman's Chapman Capital.

"This agreement definitively puts us on the final path to a successful outcome of our strategic alternatives process," said Dr. Leslie Hudson, Interim President and Chief Executive Officer of Nabi. "We feel this transaction not only will realize value for Nabi shareholders but also will allow us to build on the promise of our Pharmaceuticals SBU pipeline."

Once the sale is complete, Nabi will begin its new life in Rockville, Md. and continue to seek a partner to commercialize its nicotine and Staphylococcus aureus vaccines, the lead products remaining in its pipeline. Chapman and other large investors have yet to respond to the buyout offer.

In the end this sale priced at roughly $3.03/share could cause problems for Chapman, who previously stated that the company could get $5/share for the unit. However, the cash infusion is certainly good news for shareholders as it provides the company with capital and allows them to increase their focus on developing their remaining pipeline and finding a commercial partner. Combined, these factors make NABI a stock worth watching!

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ArcSight Inc. (NDAQ:ARST) is planning to raise up to $74.75 million in an initial public offering, according to its S-1 filing with the SEC. The leading provider of data security solutions is definitely in the crosshairs of investors and should prove to be another hot tech IPO.

"We are a leading provider of security and compliance management solutions that intelligently mitigate business risk for enterprises and government agencies," said the company. "Much like a 'mission control center,' our ArcSight ESM platform delivers a centralized, real-time view of disparate digital alarms, alerts and status messages, which we refer to as events, across geographically dispersed and heterogeneous business and technology infrastructures."

How is the company doing? Well, ArcSight was founded in May 2000 and first sold their initial ESM product in June 2002. Since then, revenues have grown from $32.8 million in the fiscal year ended April 30, 2005 to $69.8 million in the fiscal year ended April 30, 2007.  Notably, they achieved positive cash flows from operations in the fiscal years 2004 through 2007.

The future also looks extremely bright for the company. According to a report by IDC, ArcSight's market is projected to grow, in aggregate, from $993.6 million in 2007 to $2.2 billion in 2011, representing a compound annual growth rate of 22.1%. Secordary markets that the company operates in are also projected to grow at rates above 19% compound annual growth.

In the end, this may be an IPO similar to that of VMware which jumped substantially from its initial offering price. The data security market is quickly growing and promises to be one of the hottest areas in the technology sector. Combined, these factors make ARST a stock worth watching!

Carl Icahn increased his stake in Temple-Inland, Inc. (NYSE:TIN) according to a Schedule 13D/A filing with the SEC today. The famous investor picked up over 160,000 shares on the open market an exercised three call options for over 4.2 million additional shares bringing his current stake to 8.65 percent.

Icahn and other activists have been involved with the Temple-Inland for almost a year now after he proposed a breakup of the company to unlock value. Last month, the company finally bowed to Icahn's demands by selling its timberland properties for $2.38 billion and agreeing to spin-off two other business segments. The proceeds were/will be used to pay down debts and fund a share buyback program.

Temple-Inland Inc. made further progress toward completing its previously announced transformation plan when its subsidiaries Forestar Real Estate Group LLC and Guaranty Financial Group Inc. each filed with the Securities and Exchange Commission a Registration Statement on Form 10 on August 10th.

Meanwhile, Temple-Inland has also been working to cut down its costs by laying off 50 employees and undergoing other measures to control costs. According to analysts polled by Zach's, "[We] like that the company is offsetting high operations costs through higher-than-expected cost reductions from various initiatives, other ongoing cost reduction programs, and project TIP.

Furthermore, a share buyback program, internal improvements and underlying asset values could provide upside to the stock going forward. In addition, analysts believe the company is better positioned compared to other paper and forest product companies as its corrugated strategy is estimated to offer protection during periods of price declines."

In the end, Temple-Inland is clearly on track yet its shares have been dropping off of their highs. This has created a buying opportunity that Carl Icahn has used to increase his bet on a successful restructuring. Combined, these factors make TIN a stock worth watching!

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Liberty Media (NDAQ:LCAPA) announced a special shareholder meeting last week set to take place on October 23rd to discuss and vote on a proposed breakup of the company brought to shareholder attention several months ago. Management is hoping that the breakup will help the company unlock value for shareholders, according to a recent S-4 filing with the SEC.

The proposed breakup would divide the company into two operating segements. Liberty Entertainment would receive Starz Entertainment and FUN Technologies as well as equity interests in GSN and WildBlue. The segment would also receive a $588 million cash payout resulting from the company's pending sale of DirectTV to News Corp in exchance for taking on $551 million in publicly traded debt. Liberty Capital - the other segment - would receive the rest of the company's current assets and subsidiaries.

"The reclassification proposals are intended to provide us with greater flexibility with regard to making acquisitions and raising capital, by allowing us to use equity securities relating to the Entertainment Group and its more focused group of businesses and assets," said Liberty Media in a statement. "We also believe implementation of the reclassification will further clarify our capital structure and result in greater market recognition of the value of both the Capital Group and the Entertainment Group, thereby enhancing stockholder value over the long term."

In the end, this deal could provide shareholders with great returns that come as a result of value being unlocked from undervalued assets. Spin-offs also tend to outperform the overall market in their first two years of being a public company, so shareholders can also look forward to statistics working on their side. Combined, these factors make LCAPA a stock worth watching!

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Blackstone Group (NYSE:BX) announced today that it purchased a 20 percent stake in Chinese chemical producer China National BlueStar Group, which could cost upwards of $600 million. The landmark deal is one of China's largest involving one of the most instrumental investment groups in the world.

Many hedge funds and private equity firms having been looking to move into Chinese companies to take advantage of the country's spectacular growth. However, investment in government-controlled entities such as BlueStar can prove to be difficult without strong connections.

Blackstone's connections with the Chinese run deep since its government took a 9.4 percent stake in the investment group. Many analysts see this deal - one of the largest in China - as the beginning of a potentially lucrative long-term relationship with China. This makes BX a stock worth watching!

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Billionaire currency trader Joseph C. Lewis paid $860 million to acquire a 7 percent stake in Bear Stearns (NYSE:BSC) making him the brokerage firm's largest shareholder, according to a Schedule 13D filing with the SEC. The company's shares rose more than 3 percent on the news.

Bear Stearns shares have already declined more than 30 percent this year, primarily due to the collapse of the subprime mortgage market. Two of the company's hedge funds had been trading mortgage securities and experienced a loss of approximately $1.5 billion by the time the fiasco came to a close.

Lewis is the latest in a series of insiders and investors that have been taking large stakes in banks hurt by mortgage and credit worries. In fact, insider buying in the banking industry is near an all-time high as many are extremely confident in a turnaround.

There is also speculation that the billionaire may be interested in taking the company private. Lewis did this once before in the 90s after acquiring 30 percent of Christie's International. In the end, however, it is most likely that this is a more passive investment that may involve some communication with management (as it is a 13D and not a 13G). Regardless, this is definitely a stock worth watching!

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Plains Exploration & Production Company (NYSE:PXP) may face some opposition to its pending acquisition of Pogo Producing Company (NYSE:PPP) after Fir Tree Partners disclosed a 9 percent stake and argued against the merger in a Schedule 13D filing with the SEC.

"Our decision is based upon detailed financial analysis which suggests that a termination of the transaction could result in PXP’s share price appreciating by 70% or more over the ensuing year," said the activist hedge fund in a letter to the company's board.

"Large scale share repurchases are a much more efficient use of shareholder capital given the extreme decline in PXP’s share price that was sparked by the announcement of the PPP deal and the negative natural gas price environment which makes PPP a less attractive/less valuable asset."

The initial deal announced in July seemed like a great idea to most shareholders as it would have provided accreditive cash flows to the PXP shares in the near term and diversify its reserves. However, since this announcement the macro environment and industry fundamentals have changed materially.

Moreover, PXP has lost about $1 billion in shareholder value as a result of the announcement. A share repurchase - on the other hand - would have allowed the company to repurchase 30 percent of the company while maintaining a debt/EBITDA ratio of 2.0x to 2.5x.

"We believe PXP will generate over ~$1 billion in after-tax proceeds over the next twelve months from the opportunistic sale of its non-core assets. Accordingly, the company could use the proceeds from these divestitures to repurchase 20-25 million shares," said Fir Tree Partners.

"Assuming the company was valued at comparable company levels, PXP shares would be worth $70-75, representing 70-90% upside from current share levels. We believe upside remains to this valuation if the company successfully completes the formation of an upstream master limited partnership."

What happens with the proposed acquisition remains to be seen, but this stock is definitely one worth watching!

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HSBC Holdings (NYSE:HBC) board members and executives may find themselves in trouble soon after Knight Vinke revealed a campaign to change the bank's strategic direction. The activist hedge fund has enforced change in large companies like Shell and Gaz de Frace before by rallying support of other large investors while holding just a small stake of its own.

Knight Vinke said in a statement late Thursday that it intends to engage in "constructive dialog" with Europe's largest bank over the "future direction and governance of the group". The hedge fund had reportedly already held discussions with the chairman and finance director beginning in mid-May.

Analysts and investors have questioned the timing of this statement, however, given that the bank has already shifted its focus to the emerging markets and has been one of the best performing banks in the market over the past months. In the past, the hedge fund has managed to rally support because the company's were not enacting change and were performing below their potential.

Whether or not the activist hedge fund can rally other investors to make changes remains to be seen, but this is definitely a stock to watch in the meantime!

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