NitroMed (NDAQ: NTMD) buyout offer from Archemix received some opposition from an activist hedge fund. Deerfield Partners said that the merger overvalues Archemix and contains numerous conflicts of interest. Moreover, Deerfield, which holds a 12% stake, offered to acquire the company for $0.50 a share, liquidate the company and distribute the proceeds to shareholders. This would represent a substantially higher value than the current offer on the table.

The majority of NitroMed’s value can be found in its $17.8 million in cash, equivalents and short-term investments as of September 30th. The company also stands to get an additional $26.3 million from the pending sale of heart failure drug BilDil, which was approved for African-American patients in 2005 but never gained significant market share. Assuming these sales, NitroMed would have about $44 million in cash to offer either shareholders or Archemix.

“We ask that you seek a tangible means to deliver NitroMed shareholders fair value for their ownership of the BilDil assets,” said James Flynn of Deerfield. “If there is a means for shareholders to appreciate your current proposal provides in excess of $0.50 per share, it should be simple to articulate, and the shares should appreciate appropriately. If this cannot be demonstrated and you remain committed to your currnt course, additional costly actions will be unavoidable.”

It’s not common for investors to push for liquidation, but Deerfield believes that NitroMed’s cash, including the payment for BilDil, minus the costs winding down the company, would allow a distribution to shareholders of $0.50 per share in cash and potentially a good deal more. This would represent a substantial premium over the firm’s current share price of just $0.36 per share.

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The Securities and Exchange Commission's (SEC) EDGAR may have some competition on its hands as the industry consolidates. Morningstar (NDAQ: MORN), a popular investment research and data firm, has acquired 10-K Wizard, a premier provider of SEC filings research and alert services, for $12.5 million subject to working capital adjustments. 10-K Wizard is one of many SEC filings firms that has been developing data mining tools to make sense of complex filings as well as compare different filings and time periods.

Other competitors include public companies like Accelerize New Media's (OTC-BB: ACLZ) SECFilings.com and EDGAR Online's (NDAQ: EDGR) EDGAROnline.com platforms. Morningstar will use the acquisition to add to its overall research services and said that 10-K Wizard's technology can be applied to documents of all kinds, like its mutual fund prospectuses.

The SEC is bringing more transparency to the marketplace by introducing the ability for pubicly traded companies to data-tag their financial statements using its new XRBL mark-up language. Instead of sifting through one form at a time, investors will be able to instantly search and collate information to generate retports and analysis from thousands of companies and forms.

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AIG Group (NYSE: AIG) received a letter from their dear friend Hank Greenberg Monday inquiring as to the status of government funds being used to fix the firm. The former Chief Executive has good reason too – he still owns nearly 8% of the company.  Mr Greenburg’s exact question dealt with their use of funds to buyout CDO counterparties at what he saw as favorable terms.

Here’s a copy of the letter filed in their Schedule 13D/A:

There are any number of things that we ought to catch up on, but you are probably busy and so am I, so I’m not sure it will happen in the near term.
 
I am curious about the latest change in the AIG terms with the New York Fed (still far from the right mark). One of the Maiden Lane special purpose vehicles purchased approximately $50 billion of CDOs at par, at least that is what has been reported, and obviously canceled the default swaps. It is hard to believe that the counterparties would be carrying the CDOs at par and not have marked them to market.  If so, what is the rationale for buying them back at par?
 
The counterparties were advised to keep the approximately $35 billion of collateral that had been transferred to them.  AIG wrote down the CDOs to reflect their underlying value which was approximately 50%.  I am sure I am missing something, and I would be more than interested in finding out what transpired.  It certainly seems it was very good for the counterparties.

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