Carl Icahn revealed an increased stake in BEA Systems, Inc. (NDAQ:BEAS) in a Schedule 13D/A filing with the SEC today. The news comes amid a push from the activist investor towards a sale of the company, despite hefty opposition from executives.

Icahn increased his holdings to 43.3 million shares, or 11.05%, from 38.72 million, or 9.88% in September. His holdings also include call options to purchase BEA shares, which are presumably reserved incase a proxy battle results from this conflict when he could exercise the shares for increased voting control.

Mr. Icahn said in past filings that he believes that a sale of the company to a strategic acquirer will maximize the price of the shares. The billionaire investor also said he was seeking talks with management to discuss possibilities of a deal and said he may seek to nominate members for election to the Board of Directors.

In the end, this is great news for shareholders as any sale of the company would likely result in a substantial premium being paid. Icahn also has an impressive trackrecord of success with all the companies that he has been involved with. Combined, these factors make BEAS a stock worth watching!

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Sprint Nextel Corp. (NYSE:S) shares rose $0.79, or 4.21%, to $19.55 during today's session on news that activist investor Ralph Whitworth is turning up the heat on chief executive Gary Forsee and other directors. Shareholders are hoping that the activist can help implement change in the nation's third largest wireless carrier, which has both lost customers and seen its shares drop 27% since its 2005 acquisition of Nextel.

Ralph Whitworth said in an interview that he has "lost confidence in Gary Forsee ... primarily because of management's inability to forecast the company's results and their apparent inability to address the fundamental issues surrounding the core business." Those close to the situation say Whitworth has been pushing for a meeting with the board before the company's annual strategic-planning weekend early next month.

Many of these investors have concerns over the company's WiMax initiative in which the Sprint plans to dump over $5 billion into by 2010. While the company hopes to realize $2 billion in revenue by that time, many are skeptical and have expressed concerns about such a large investment in an emerging technology and platform.

Meanwhile, Sprint claims that it is ontrack for a turnaround with a small 16,000 increase in "post-pay" subscribers, which are its highest valued segment. But many investors and analysts are not convinced that the company is back on track - at least enough to justify the giant new WiMax project. In the end, an activist like Whitworth may be able to talk some sense into the company and ensure that shareholder value is preserved. This makes S a stock worth watching!

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A large Inksure Technologies (OTC:INKS) shareholder demanded that the software company immediately work to unlock shareholder value through a sale, merger or restructuring, according to a Schedule 13D/A filing with the SEC. Shareholders are hoping that the activist investor can convince the company to unlock value in the short-term.

James E. Lineberger Jr., who owns 8.2% of the company, said in a letter to the board that a strategic buyer for Inksure is in the best interest of all stakeholders given the company's lackluster growth and undervaluation. Moreover, action should be taken now while the company still has some momentum, a credible customer base, newly introduced technology, and cash balances to support its operations.

"As we consider the Company’s future based on its past operating and financial history and contrast it with its capital requirements, it is evident to us that immediate action is required by the directors to protect shareholder value," said Lineberger. "It is not in the best interest of stockholders (or for that matter any other stakeholders) for Inksure to remain independent."

Currently, Inksure is running an accumulated deficit of $17 million due to expenses related to its RFID project research and development. With no clear end in sight for the continuing development expenses and the uncertainty of the viability of the RFID project, the cash drain is likely to only continue.

There is also question as to management's integrity, "Further, it is clear to us that a substantial number of shareholders and other stakeholders of the Company have lost faith in the Chairman/CEO of the Company and believe that he has no credibility in the marketplace."

In the end, a sale process could generate substantial returns for shareholders and is probably the best available solution for the company. It will be interesting to see if the board agrees with the activist investor and hires and investment bank to explore its options. Meanwhile, this is definitely a stock worth watching!

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Bristol-Myers Squibb Co. (NYSE:BMY) shares continued their climb today amid speculation that the company could be a takeover target for a larger un-named pharmaceutical company. Implied volatility jumped over 5% during the past week indicating an increased bet on bullish price action.

The pharmaceutical company has been the target of takeover rumors for some time now, specifically with France's Sanofi-Aventis who was previously rumored to be interested in the company. Options activity looked similar to yesterday's before it died down along with the rumors.

Bristol-Myers does not comment on market speculation, but with 26,700 call options trading hands yesterday compared to only 2,800 puts, this is definitely a stock to keep an eye on. It seems that many traders are betting on the November $30 call options, meaning they expect the price of the stock to exceed $30 in about a month.

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SunAmerica Focused Alpha Growth Fund Inc. (NYSE:FGF) is a successful non-diversified, closed-end managment investment company that is starting to catch the attention of hedge funds given its somewhat cheap valuation and growth prospects. The fund has moved up over 23% since mid-2006 and recently declared a dividend in August. 

Karpus Management, which owns 4.34% of the company, disclosed a Schedule 13D filing yesterday indicating that it acquired shares in the company for investment purposes but reserve the right to contact management with regard to concerns they have with the fund - presumably the growing valuation gap. This is especially interesting given Karpus' specialty focus in closed-end funds.

Many activist shareholders have targeted undervalued closed-end funds seeking to convert them to open-ended funds or forcing them to liquidate their undervalued positions and return the proceeds to shareholders via a special dividend or share buyback. Real estate closed-end funds in particular have been pressured to convert to REIT structures in order to unlock value.

In the end, we still do not know whether Karpus intends to do anything with its investment in SunAmerica. However, activist hedge funds have been increasingly looking into this sector, making this a situation that is definitely worth watching!

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PDL BioPharma, Inc. (NDAQ:PDLI) finally bowed to the demands of activist shareholders by announcing that it will seek offers for the sale of the company as a whole or of its key assets, according to a press release put out by the company yesterday.

The pharmaceutical company announced that it has completed its review of strategic alternatives and decided to pursue a sale of some or all of the company's assets. To this end, PDL has retained Merrill Lynch to help it shop itself and maximize shareholder value.

"Following a comprehensive review of available options, the PDL board has concluded that seeking offers for the sale of the company as a whole or of its key assets is our primary strategic focus," said Ms. Dawes, chairperson of the board. "We look forward to working with our advisors and interested parties to maximize stockholder value."

The company also announced that Mark McDade has stepped down from his position as chief executive and director effective immediately. Shareholders have been pushing for such a move for some time arguing that it was McDade who mismanaged the company and destroyed shareholder value. Patrick Gage has stepped in as interrim CEO until a suitable candidate can be found.

 "I look forward to leading the talented and dedicated employees of PDL during this time of transition to build stockholder value through increasing our operational efficiency and driving our business forward," said Dr. Gage, interim CEO.

In the end, this is great news for shareholders who have been struggling with lackluster performance for years. It also marks another success for Daniel Loeb's Third Point LLC and Steven Cohen's SAC Capital who have both pushed (albeit passive for SAC) for McDade to step down and the company to act to unlock shareholder value. Combined, these factors make PDLI a stock worth watching!

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AMR Corporation (NYSE:AMR) announced a plan today to reduce its interest expense amid pressure from activist shareholders to improve its financial results. The plan calls for the American Airlines parent company to prepay $545 million in aircraft debt in the forth quarter and should cut annual interest expenses by $25 million, according to their press release.

"With our improving financial performance, we have bolstered our liquidity position and we have opportunistically strengthened our balance sheet by reducing debt," said Thomas W. Horton, Executive Vice President of Finance and Planning and Chief Financial Officer of AMR. "While we have more work to do, our recent decisions not only improve our balance sheet, but also reduce our interest burden going forward and give us more financial flexibility for the future."

This new plan supplements existing actions taken by the company in the first half of 2007, including debt prepayments, bond refinancings and the lowering of interest rates on a credit facility. Combined, these actions eliminated an incremental $27 million of annual net interest expense, in additional to the net interest expense savings from AMR's scheduled debt amortizations. In the end, the company expects its net interest expenses to be $130 million lower than its expenses for the same period in 2006.

Clearly, AMR is doing what it can to reduce its expenses and improve its balance sheet to help unlock value for shareholders. Shareholders also applauded the move as AMR stock rose over 10% during the past two days. In the end, this is great news that makes AMR a stock worth watching over the next few months!

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Furniture Brands International, Inc. (NYSE:FBN) shares rallied for a second day after Samson Holding revealed a business combination proposal that the company declined to pursue in a Schedule 13D filing with the SEC. Shareholders are clearly excited about the interest as shares jumped almost 30% yesterday and another 7% in early trading today.

"[We] presented a proposal to the Issuer in July this year with respect to a possible business combination transaction, which the Issuer declined to pursue," said Samson in a statement. "The Issuer is a major customer of Samson Holding and in a business that is complementary to the Reporting Persons’ businesses and/or investments."

The Samson group said that it "may consider various alternative courses of action and take any action deemed appropriate" including seeking to acquire control of the company or pursuing board representation. This hardliner stance is the main reason shares in the company have risen to greatly.

In the end, any business combination is great news for shareholders as it would mean a significant premium to the company's current market price. Obviously, shareholders are very interested in such a deal as the share price has spiked on the news while the company seems like it may be resistant. Overall, this is a great stock to watch as this situation unfolds!

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A large shareholder of Duckwall ALCO Stores Inc. (NDAQ:DUCK) recommended several strategic changes for the company in a recent telephone conversation with Chairman Warren Gfeller, according to a Schedule 13D/A filing with the SEC. Shareholders and analysts are hoping that this could be a turning point for the company.

Strongbow Capital, which owns 14.2 percent of the company, suggested that the company expand the size of the board by one member and create an executive committee of the board that would be authorized to exercise all powers and authority of the board in the management of the business.

The hedge fund suggested that this executive committee work to reduce average inventory levels, reduce SG&A expenses and reduce losses from shrinkage. Strongbow also recommended that its own representatives occupy the additional board seat and be appointed to the executive committee.

Shareholders are hoping that this move can help bring accountability back to management and help the retailer improve its balance sheet and cash positions. It will be interesting to see if the company agrees with Strongbow and implements these changes. If so, this is definitely a stock worth watching!

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Bioenvision Inc. (NDAQ:BIVN) may have trouble pushing through its proposed merger with Genzyme after a major shareholder reiterated its intentions to vote against it in the company's upcoming annual meeting. Shareholders are divided on the issue that promises to be a close call on October 14th.

SCO, which owns 13.1% of Biovision, called the $5.60 offer extremely inadequate and the result of a poorly managed and ill-timed sale process. The activist hedge fund believes that the company should instead work on behalf of shareholders to maximize value over the near term through alternative strategies.

"We remain highly confident that clofarabine will be approved in the European Union for the treatment of adult AML in 2008," said SCO in a letter to the board. "We believe that Bioenvision will be well positioned, within a 3 to 6 month timeframe, to engage an independent investment bank to do a well-run process to market the company to possible acquirors, and that there will be considerable interest in clorfarabine. We believe that this type of processs could lead to an offer price well in excess of the current offer price, leading to a success for all common shareholders including Genzyme."

SCO also announced that it intends to propose a new slate of directors for the next annual shareholders meeting that would work to this end and unlock value for common shareholders. Combined, these factors make BIVN a stock worth watching!

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