Kellwood Company (NYSE: KWD) shares spiked today after a private investment firm is taking its $542.3 million cash offer for the company straight to shareholders. Sun Capital Securities Group offered $21 per share for the apparel maker today, which represents a premium over the stocks $16.51 closing price on Monday. Clearly, many shareholders are bullish on the news as shares rose over 10 percent today.

Sun Capital failed in its two previous attempts to take a buyout bid to the board of directors. “We are disappointed that Kellwood’s board is unwilling to enter into a constructive dialog with us regarding what we believe is a very compelling transaction,” said Jason Bernzweig of Sun Capital.

Sun Capital, which already owns 9.9% of the Kellwood, values its direct tender offer at $762 million but noted that it hinged on Kellwood ending its $60 million debt tender offer which destroys the company’s value. Otherwise, the firm will drop its buyout price to $19.50 per share.

Sun Capital also announced that it would be nominating its own slate of directors for election to Kellwood’s board at the 2008 annual meeting if the company fails to reach an agreement soon. Indeed, this may be their only option after two failed traditional attempts and a failed tender offer placed directly to shareholders.

So, will they be successful this time by going straight to the shareholders? Well, clearly shareholders are bullish on the idea of a direct tender offer, so it will be interesting to see what kind of response rates they are able to obtain. And even if they do not succeed, they may have built up a substantial enough stake to make a real run at the board of directors. Combined, these factors make KWD a stock worth watching!

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Transmeta Corporation (NDAQ: TMTA), well known for its patent battle with Intel, may face some scrutiny by its largest shareholder. Riley Investment Management demanded that the company provide records for an investigation of potential mismanagement by the company’s board of directors. Many analysts and shareholders are not surprised by the move, which comes after a litany of other jabs that the activist investor has taken against the company – all justified.

“The purpose of this demand to inspect the Company’s Books and Records is to investigate potential wrongdoing, mismanagement, waste of corporate assets or breaches of fiduciary duties by members of the Company’s Board of Directors and to assess the ability of the Company’s board to impartially consider a demand for action (including, without limitation, a request for permission to file a derivative lawsuit on the Company’s behalf) related to the items described in this demand,” said Riley in a statement.

Riley previously criticized Transmeta for awarding “staggering options grants” to certain executive officers, which would have diluted shareholders by more than five percent. The activist investor also said the company failed to adequately disclose the formula behind a hefty bonus payment awarded to General Counsel John Horsley, related to the company’s $250 million patent settlement with Intel.

Now, Riley has requested that the company provide details on executive compensation along with any business and/or social relationships between the board members and executive officers. Ever since Transmeta has obtained the $250 million Intel settlement, it appears as if things have gotten out of hand and Riley is here to clean up the mess! This is great news for TMTA shareholders who could start actually seeing the proceeds from the $250 million if this activity stops.

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Tellabs, Inc. (NDAQ: TLAB) has seen a lot of action recently ahead of its earnings announcement this week and continued speculation that it could be a buyout target. The telecommunications and technology company recently hit a 52-week low of $5.09, which is well off of its highs around $13 per share. However, unusual call option volume triggered a rebound in the stock price that has many investors now bullish on this troubled stock.

Last week, Tellabs saw nearly 10,000 call options traded, compared to only 1,753 puts and average daily volume of 1,350 contracts. There was a similar story on Friday with 15,200 call options traded and the trend has only continued into this week. This activity caused a noticeable rebound in the stock price that now sits closer to $6 per share – nearly 20% off of its 52-week lows.

Some of this movement is attributed to a new rumor that Nokia may be interested in acquiring the company. In the past, valuations for such buyout of TLAB have been pegged at $9 or $10 per share. There was also talk of a “rich offer” made by Nokia in the past, although they would not confirm this fact to the public. However, the Wall Street Journal’s commentary confirms that the talk was indeed out there and making rounds. Clearly, any such offer would be a windfall for shareholders at these prices.

Other analysts attribute the rise to key indicators that earnings may be better than expected. Verizon recently reported that slowing economic growth was not curbing its sales and that it would spend $23 billion over seven years to build out a fiber-based network that offers TV and faster Internet speeds for home users. This is great news for Tellabs, which is a leading provider of fiber-optical products for Verizon. Tellabs has a product that benefits directly from these trends.

In the end, there is clearly reason to be excited with Tellabs. The idea of a buyout is still just that – an idea. However, the company appears to be well positioned to take advantage of growing trends in the fiber-optics market. Combined, these factors make TLAB a stock worth watching!

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