A large Plains Exploratin & Production (NYSE:PXP) shareholder expressed concerns over the company's lack of a strategic plan for its proposed merger with Pogo Producing Company (NYSE:PPP), according to a Schedule 13D filing with the SEC. Shareholders are hoping that this larger player can help the company formulate a plan to unlock shareholder value.

Sandell Asset Management, which owns a 5.1 percent stake in the Houston-based company, said in a letter to the board that it supports the transaction but would like to see a strategic plan put in place for the company post-closing. The hedge fund urged a number of actions, including asset sales, MLP creations and aggressive share repurchases.

"As you probably know based on our recent meetings and conference calls, while we are inclined to support the Pogo transaction, we are concerned by your inability to provide a concrete plan for the combined company post-closing," Thomas Sandell said in a letter to the board.

To remedy this, Sandell wants to see the hedge fund sell oil reserves and use the proceeds to fund share repurchases. Simultaneously, the hedge fund wants to see the company form a master limited partnership for all of its reserves in California and the Piceance basin. Combined, these efforts would unlock millions in value for shareholders.

"We are confident that undertaking [these actions] will result in dramatic value creation for all shareholders of up to $90 per share (+80%)," said Thomas Sandell. "We believe the market unnecessarily discounts PXP’s value by using unrealistically low commodity price assumptions and giving little credit for unproved and non-core assets."

In the end, this is all great news for shareholders. Shares of PXP have seen very modest appreciation given the price of oil and shareholders are ready for a change. The lack of planning surrounding the acquisition of PPP has caused the share price to plummet and create buying opportunities for enterprising investors. Combined, these factors make PXP a stock worth watching!

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Delta Air Lines (NYSE:DAL) caught many investors and analysts offguard today after chief executive Richard Anderson hinted that the company may be interested in pursuing some deals during an earnings conference call earlier this week. The news caused widespread speculation on possible targets.

Anderson commented that consolidation "could make sense for Delta if it's done thoughtfully from a position of strength". The executive also made it clear that Delta "wants to be in control" as an acquirer as opposed to an acquisition target itself. The comments caught many by surprise given rising energy prices and pressure within the industry to increase profitability.

Interestingly, Delta recently emerged from bankruptcy itself after resisting a hostile takeover bid from US Airways Group. Many had speculated that Delta would sell itself during the bankruptcy process to settle with debtors; however, the airliner surprised many by emerging as an independent company.

Airline mergers are a traditionally difficult thing to make happen, but many industry analysts believe that Northwest Airlines may be the most likely target. Others suggest that the company may look into a more niche airline like JetBlue or Alaska Air Group. Smaller niche airlines may enhance certain routes, but larger acquisitions would offer more flexibility when it comes to supplier negotiations and leveraging economies of scale.

In the end, all of this speculation is just talk as of right now. However, any acquisitions in the airline industry would certainly make for an interesting strategy on behalf of Delta given its position. Combined, these factors make DAL a stock worth watching!

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Steven Madden (NDAQ:SHOO) may find itself in hot water after the Clinton Group disclosed a 5.1 percent stake in the company and suggested several ways in which to unlock shareholder value in a Schedule 13D/A filing with the SEC. Shareholders are hoping that the company will embrace these measures and restore the stock price to its rightful levels.

The activist hedge fund believes that the market has misunderstood the prospects for the business and that has resulted in a stock that is trading at just 5.1x 2007 EBITDA. This valuation is both historically low for the company and well below peer valuations seeing between 10x and 13x 2007 EBITDA. Clearly, there is a disconnect here that shareholders want fixed.

"We believe that the Steven Madden brand has never been stronger, and we believe that the management team and board share this view," said Clinton Group VP Joseph De Perio. "That strength,and the Company's balance sheet, makes this an optimal time to seize an opportunity to enhance shareholder value."

What measure might this include to unlock value? Well, the Clinton Group recommended a Dutch Tender of $180 million to repurchase the company's shares. The hedge fund reasons that the company's current cap structure is inefficient given its free cash flow, ongoing strong earnings and limited capital expenditures. As a result, the company could use $72 million of free cash combined with a $110 million senior debt financing to fund a Dutch Tender.

The share repurchase would result in approximately 40% of the shares being taken off the market if the buyback is executed at a range above $21 per shares - of a 13.5% premium to the current market prices. The extraordinary accretion from this transaction produces implied stock prices worth more than current levels and a premium to the hedge fund's proposed tender price of greater than 20 percent!

These suggestions may be moot; however, as the company today announced that it was evaluating several potential takeover offers as well as strategic alternatives. In the end, this is all great news for shareholders as it could mean a significant jump in the valuation of their stock. Combined, these factors make SHOO a stock worth watching!

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