Griffon Corporation (NYSE:GFF) shares moved up $1.54, or 6.97%, to $23.65 today after Clinton Group disclosed an 8.5% stake in the company and suggested that the company undergo a recapitalization. The proposal would tender 50% of Griffon's outstanding shares at a price of $25 per share, but has yet to receive a meaningful response from the company.

Clinton Groups proposal is contingent on financing from two lien bank loans and financing from the hedge fund and its affiliates. The proposal would also require the hedge fund to institute several of its own board members and implement a restructuring plan aimed at improving the profitability of Griffon's businesses.

In the end, Clinton Group believes that a recapitalization of the company combined with measures designed to reduce expenditures and improve the bottom line would drastically increase the stock's valuation. Using a multiple of 15x price to earnings on a tax affected $20 million of savings divided by a share count 43% less than the current number yields in excess of $9 per share in incremental value. Clearly, this would be great news for shareholders and makes GFF a stock worth watching closely!

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Motorola Inc. (NYSE: MOT), the wireless handset and cell phone maker, announced yesterday that it would be laying-off another 4,000 workers, in addition to the 3,500 job cuts it announced in January, as part of its continuing efforts to manage costs.

These new lay-offs, in conjunction with other cost-cutting measures, are predicted to save the company $600 million in 2008, and the previously announced workforce reduction will ultimately eliminate another $400 million in costs.

The continuing efforts at Motorola to tighten the corporate belt are described by company CFO Tom Meredith as an "update to the commitment...to drive out additional costs," an initiative announced at the company's first-quarter conference call.

Motorola is in need of cost controls as it posted a net loss in the first-quarter of this year in the face of declining handset sales and lackluster new cell phone models. The poor performance of the company's stock, only a dollar off its 52-week low, led activist billionaire investor Carl Icahn, who has a 2.9% stake in the company, to seek a seat on its board in elections this month.

Icahn lost the election to the company-backed candidate, John A. White, by a margin of about 13% but still received more than 700 million votes in the process. The election followed a series of exchanges, primarily in letters to shareholders, between Icahn and company management in which Icahn attacked what he saw as mismanagement of the company, especially in comparison to rival Nokia (NYSE: NOK).

Motorola stock is basically unmoved, down .27%, on the news today.

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Dendreon (NDAQ:DNDN) shares rocketed $2.72, or 40.36%, to $9.46 in early trading today after the company received confirmation that the FDA will accept either a positive interim or final analysis of survival from its ongoing IMPACT study to supplement the Biologics License Application for Provenge. We began covering this story on May 21st when we noted the widespread support for the drug from doctors and patients alike. The problem was that the FDA said it would delay the approval of the drug for some time - which could signal trouble for investors. Perhaps the FDA felt the heat from supporters or simply changed its mind, but regardless this latest press release is very bullish for the company.

Today's news that the FDA will accept a final analyiss of survival to supplement the BLA for Provenge indicates that they may significantly reduce this delay. Obviously, if the delay is reduced or eliminated and Provenge is approved for use, it would mean significant share appreciation for investors in DNDN. The drug targets a large underserved market that could generate substantial revenues over the long-term and perhaps even make the company a takeover target for a larger pharma player. Combined, these factors make DNDN a stock that is certainly worth watching!

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Jo-Ann Stores (NYSE:JAS) moved up $0.99, or 3.29%, to $31.05 today after the company announced positive earnings for the quarter. The specialty retailer announced a net loss of $0.07 per diluted share compared to $0.28 per diluted share a year ago. Same-store sales - or comps - increased 1.8% this quarter compared to a loss of 3.9% a year ago.

Investors are also carefully watching the bidding process for the company, which may end up topping $1 billion. The group of bidders reportedly consists of middle-market private equity firms including Leonard Green & Partners and Freeman Spologi & Co. There are also reports that larger firms like Blackstone may be looking at the company. Final bids, however, are expected to be in by June when Lehman Brothers will then evaluate them along with the board of directors.

But just how much could the company fetch? Well, the company's improving margins and growth prospects may certainly increase the final bidding price. The company's main competitor, Michael's Stores, was also recently acquired for 12.8x EBITDA and a 30% premium to the stock's closing price on the day it announced that it was exploring strategic alternatives. These metrics seem to confirm the fact that the Jo-Ann could fetch a nice premium. This makes JAS a stock worth watching!

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ESS Technology (NDAQ:ESST) shares rose over 8% this week after Riley Investment Management disclosed a 1.3m share stake in the company and expressed their concerns over the company's management and valuation. The company operates in the semiconductor industry and services the consumer electronics and digital media marketplace. These have been the subject of many recent takeover attempts and could be an industry for further consolidation.

Riley believes that the shares are undervalued and that the current restructuring should be expedited with the ultimate conclusion being a liquidation of the company. Ultimately, the activist hedge fund believes that a liquidation of the company could result in a 100% appreciation of ESST shares; however, that value deteriorates every day the company functions in its current structure. The fund is also concerned that the company may make an acquisition that will further deteriorate the remaining equity value. Consequently, Riley will issue one more letter to the company's board describing their position in greater detail while threatening to replace members of the board if no action is taken. Combined, this is great news for shareholders as it could mean a significant increase in value over the short term. This makes ESST a stock worth watching!

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Interactive Brokers Group (NYSE:IBKR) shares plummeted $1.98, or 7.19%, to $25.57 in early trading today after the company released lower first quarter earnings on higher revenues. The newly IPO'd options firm posted net income of 31 cents per share compared to 34 cents per share one year ago.

Why is this so troubling for investors? Well, the brokerage market appears to be extremely hot right now with almost all competitors posting record gains while IBKR was the first to be stalling. The brokerage clearly experienced some of this upside in the market by increasing their trading volume by 40% quarter over quarter but somehow managed to report declining earnings.

Interactive Brokers reported declining revenues from trading gains and other income while interest income and revenues from commissions and fees rose. These numbers suggest that the brokerage raised its fees in order to compensate for lack of bottom-line net income growth - a negative sign to many investors. Whether this is a one-time occurrence or a larger slowdown in the brokerage industry remains to be seen; however, this stock is definitely one to watch.

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Avaya (NYSE:AV) share jumped $1.94, or 14.19%, to $15.61 after reports surfaced that the company is in buyout talks with private equity firm Silver Lake Partners. The Wall Street Journal report also said that Nortel could step up as a bidder, citing people familiar with the situation.

These days private equity buyout rumors tend to dominate the market headlines and separating fact from rumor is imperative to success. So, what facts support an Avaya buyout? Well, the company was already in buyout talks with Nortel just last month, but the deal fell through after the two parties could not agree on the cash/equity deal structure. The company also has strong cash flows and relatively little debt, making it an ideal acquisition in the fast-growing VOIP market. And finally, Avaya also postponed its May 31st analyst conference, which many see as an indication that the company may very well be in buyout talks.

Combined, these series of events along with a WSJ report citing an exact hedge fund as suitor gives some credibility to this rumor. Given the interest by Nortel, this potential acquisition by a financial buyer could be an attempt to take over the company simply to resell it at a higher multiple to larger strategic buyers in the near future. This is likely why Nortel or other strategic buyers could place their own bids to attempt to get the company for cheaper. Regardless, this is definitely a stock to keep an eye on as the situation unfolds!

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Building Materials Holding Company (NYSE:BLG) shares moved up $1.92, or 13.38%, to $16.27 today after Chapman Capital disclosed a 7.4% stake and expressed their concerns over the company's performance. Specificially, the activist hedge fund suggested that the stock's value could best be unlocked through a sale of part or all of the company.

Chapman first noted that while management cannot be blamed for the steep correction in the U.S. homebuilding market, the board's generous reward distribution to management during this downturn should not be overlooked. Equally troubling is the fact that management and the board have very little stake in the company while much of what they do own was granted to them free of charge. This lack of a stake in the future of the company is certainly a cause for concern.

Chapman then argued that the company is undervalued. To unlock this value the hedge fund recommended that the company immediately hire financial advisors to explore selling all or part of the company. After all, the building materials sector is clearly amid a consolidation wave. Chapman has also recently made personal contact with BLG’s peers and leveraged consolidators of the building supply industry, and they can convey an extremely high level of interest from both private equity and strategic building supply players in the acquisition of the company.

Chapman Capital recognizes the unique value of BMHC’s assets, the years and efforts required to assemble and integrate them. As a result, they are not encouraging an inopportune, undervalued sale, but instead a methodical auction timed to consummate into the inevitable cyclical recovery. And this would be great news for the company's shareholders who have suffered since the downturn in 2006!

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Circuit City (NYSE:CC) shares jumped $0.16, or 1.03%, to $15.69 today after an Associated Press story suggested that the company may need a buyout or major management shakeup to recover from recent profit warnings and increasingly intense competition.

Circuit City rejected a $17 per share buyout offer in 2005, instead opting for a turnaround effort that was quenched by a price war on flat screen televisions last year. The price war caused the company to replace 3,400 workers with cheaper labor that ended up hurting sales. Overall, the situation for Circuit City isn't looking all to good with one of its competitors even considering bankruptcy.

So, what are the chances of a buyout? Well, the fact that the company has received a bid in the past for an amount greater than the current market price suggests that it is could be a possibility. Moreover, while some other companies may be cheaper, nobody can match Circuit City's status as the second largest electronics retailer in the United States. Combined with the financial troubles that the company is in, it would not be too hard to fathom a buyout scenario. This makes CC a stock worth watching!

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Wendy's International (NYSE:WEN) shares continued their rise today after its new ad campaign debuted on American Idol earlier this week. The fast food company has been struggling to regain its advertising foothold ever since Dave Thomas passed away in 2002. Now the company is back with a fresh new campaign centered around their new slogan: That's right. Wendy's shares rose the day after the campaign as many investors hoped that it would help boost the ailing chain.

Wendy's also announced last week that the special committee of the board that had been exploring strategic options had retained J.P. Morgan as lead advisor and Lehman Brothers as co-advisor. These moves suggest that the company is beginning to seriously explore some potential extraordinary transactions such as a sale of the company, recapitalization or special dividend. It is also worth noting that activist investors Bill Ackman and Nelson Peltz have been involved in pushing the company towards unlocking value for its shareholders.

Many rumors have surfaced regarding potential bids for the company in the past; however, nothing has been confirmed. Investors do know, however, that the company is actively exploring ways to unlock value while working to increase its brand awareness through a unique new advertising campaign. The results on both of these fronts remains to be seen, but WEN is definitely a stock to watch in the meantime!

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Ditech Networks (NDAQ:DITC) shares dropped $0.24, or 2.87%, to $8.13 after the company announced lower fourth quarter earnings and narrowed its guidance. The telecom equipment provider also received a letter from 5.8% owner Riley Investment Management who suggested ways to cut costs and improve revenues while returning the company's excess cash to shareholders.

The activist hedge fund expressed its concern and outlined a plan to enhance shareholder value in a Schedule 13D filing with the SEC. Since Ditech's public offering, the company has accumulated losses of over $80 million while spending $110 million in stock and cash on acquisitions and $188 million on R&D. Meanwhile, the current enterprise value stands at a mere $114 million (including NOLs), which suggests that many investors don't have much confidence in the company's future.

Despite this bleak past, Riley believes that the company is well positioned for strong cash flows and operating profits as its customer base continues to diversify and expand. The hedge fund's analysis shows that the company could be at an EBITDA run rate of $25 million in the next couple of quarters and as high as $35 million in the near future with continued customer wins. Notably, the company also has $135 million in cash on its balance sheet!

Riley suggested that given their analysis, the company should consider implementing a series of initiatives to improve its fundamentals and return at least $100 million to shareholders through a dutch tender offer between $9 and $11 and a special dividend to return the balance. Moreover, if the hedge fund's projections were overly optimistic in the company's eyes, it should consider simply issuing a cash dividend amounting to $100 million - or $3 per share.

Riley insists that Ditech is at a critical juncture. Shareholders entrusted the company with over $75 million in cash during its IPO at $11 per share and a secondary at $50.75 per share. Since then, the company's stock has declined 84% in eight years as VCs unloaded and insiders kept their exposure limited. Now, the company's fundamentals seem to be improving while a new CEO is stepping in that better understands the company's obligations to shareholders.

Riley also noted that they may seek board representation and have done so in the past with great success. Combined, these factors make DITC a stock worth watching closely over the next few months!

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Packeteer Inc. (NDAQ:PKTR) shares moved up $0.26, or 2.73%, to $9.77 today after Elliott Associates disclosed a 6.3% stake in the company and communicated their belief that the board of directors should be directing their attention to a prompt sale of the company.

The activist hedge fund reasoned that the company had failed to adequately perform and therefore should be sold in order to unlock value for shareholders. In particular, Elliott Associates noted that the company possesses a leading technology in one of the fastest growing segments of the networking market but has been unable to capitalize on this advantage.

The hedge fund also noted that the market segment in which the company operates is becoming increasingly competitive and therefore it may be prudent to sell while valuations are still high. Moreover, there are probably many parties that would be interested in bolstering their products and services with the market leading technologies possessed by Packeteer.

Combined these factors would make PKTR an attractive target for potential suitors if the company was shopped by the board of directors. And obviously, any buyout would come at a substantial premium to the current market price making this stock one worth following!

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Dell Computers (NDAQ:DELL) shares moved up after the company announced that it would begin selling two two Dimension desktop models in 3,000 WalMart stores in the U.S., Canada and Puerto Rico beginning on June 10th.

The news marks the end of Dell's signature direct-sales policy that marked its success for the past decade. Michael Dell, the company's founder and CEO, noted that direct model has been a revolution, not a religion. The move towards retailing some of its computers is only the "first step" in a larger strategy to help the ailing computer maker to turn itself around.

The change also marks one of the more dramatic changes by founder Michael Dell after he took the reins from former CEO Kevin Rollins who oversaw declining sales and margins. Many analysts and investors are hoping that this move will help the company improve its sales and bolster its earnings. Whether or not this strategy will succeed remains to be seen; however, such a dramatic move definitely makes DELL a stock worth watching!

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Toll Brothers (NYSE:TOL) reported devastating results for their fiscal second quarter amid a housing market that continues to struggle. The home builder's earnings fell from $174.9 million to $36.9 million while its revenues sank 23% to $1.17 billion. Toll also suffers from a high cancellation rate of 19%, a 40% decline in contracts, increasing unsold inventory and a backlog that decreased by 32%. These numbers paint the picture of a housing market that continues to struggle to gain foothold and engineer a turnaround.

Toll Brothers also announced that it was so uncertain about future revenues that it will not make an earnings forecast for the rest of the year. CEO Robert Toll only said that, "We continue to operate conservatively in the current difficult market. In what generally remains a soft market, there are glimmers of strength in certain territories."

Some analysts and investors were hoping that last week's rise in the mortgage applications index would provide a boost to the company's earnings. Most analysts polled pegged the company's earnings this quarter at $0.25. However, the company's earnings ended up at $0.22 as many now believe that the rise in mortgage applications is simply the result of more strict regulations - that is, more people were being rejected and reapplying.

These results are also bad news for other homebuilding and related stocks including Home Depot (NYSE:HD) and Lowe's (NYSE:LOW). Analysts were expecting these companies to turn around in the second quarter; however, the results posted by Toll Brothers suggests that the market has a long way to go before any meaningful recovery. Regardless, this is definitely a sector to watch as we wait for the housing market to report a turnaround in demand.

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Alcatel-Lucent (NYSE:ALU) shares rose $0.38, or 2.78%, to $14.04 today after the company indicated that its restructuring efforts remained on track. The telecom equipment company announced an improving order book following an intense effort in the first quarter to bring clarity to the company's sales force and customer base. The news follows the company's merger disruptions and costs.

Douglas McIntyre at 24/7 Wall St. also suggested that the company could be a takeover target for Motorola or Nortel. Why? Well, these new numbers suggest that ALU is either taking business from these two rivals or the telecom equipment sector is improving. Even if the latter is happening, any acquisition would take some pressure off of MOT management to improve their handset business. While this is a possibility, there is no reason to believe it would happen at this point.

Overall, the Alcatel-Lucent is a company that is quickly recovering through its restructuring efforts. Meanwhile, its telecom equipment industry appears to be improving which should also help the company's margins and growth. Combined, these factors make ALU a stock to watch over the next few months!

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PDL BioPharma (NDAQ:PLDI) may face more shareholder scrutiny after activist hedge fund Third Point blasted L. Patrick Gage's response to their previous letter and expressed their concerns over the company's "woefully unsatisfactory" answers to the hedge fund's questions during a conference call on the same day. Moreover, the hedge fund's continuing investigation into the company's management and board members have uncovered more serious issues that must be addressed.

Third Point first contacted the company two weeks ago (read article) and demanded that the company (1) terminate Mark McDade's employment as CEO, (2) add three shareholder representatives to the company's board and (3) retain an investment bank to explore strategic alternatives. Moreover, based on their continuing investigation, they now also demand that the company remove Mr. Gage and Jeanmarie Guenot from their positions within the company.

Third Point has uncovered several ethical problems within the company's board and management that must be addressed in order to ensure that the company can move forward unencumbered with ineffective and/or detrimental management. These problems were uncovered during interviews with dozens of ex-employees, industry peers, industry analysts and former employers of key management personnel that are being investigated.

The hedge fund's investigations began with Mr. McDade, who has reportedly committed several ethical violations by putting his own interests ahead of the company's interests. Subsequently, the hedge fund discovered that the circumstances surrounding Jeanmarie's rise up the corporate ladder are also plagued with ethical violations. These two key personnel have led to key scientific personnel leaving the company and an ever-expanding list of expenses. Combined, these factors are significantly affecting shareholder value.

The company responded by saying that Third Point's issues with the board and management would be discussed with the entire board, who would then make a decision on behalf of shareholders. However, the hedge fund is now concerned that Mr. McDade and Dr. Gage (the CEO and Chairman) are not accurately conveying the hedge fund's concerns to the board; rather, they are helping eachother remain in power by hiding the story from the other half of the board.

Third Point contends that these issues can only be solved by ridding the board and management personnel that are causing the problems, strengthening the board with additional shareholder representation and hiring an investment bank to help the company explore strategic alternatives to assist shareholders in unlocking the value concealed for so long by management. Whether or not this materializes remains to be seen, but this fight is definitely one to keep an eye on!

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Cadbury Schweppes' (NYSE:CSG) U.S. beverages business may receive significant interest from twelve private equity firms, according to an article in the Wall Street Journal. The first major group of contenders consists of Blackstone, KKR and Lion Capital while the second is composed of Bain Capital, Texas Pacific and Thomas Lee. It is uncertain whether the other six firms interested are considering joining a consortium or plan on placing individual bids.

Cadbury expects the beverages division to draw more than 8 billion that it would return to shareholders via a share buyback or special dividend. The move would unlock significant value but would not preclude the company from making acquisitions of its own, as the company has a strong balance sheet and could easily raise an additional 10 billion if needed.

Cadbury, without its beverages division, would be the largest confectionery group in the world and could work to increase its already-dominant position. This is good news for the long run, but may hurt the share price in the short term depending on the terms of any acquisitions. Consequently, this deal could turn out to be a mixed bag for shareholders in the short term.

While the company was quick to note that the decision to put the division up for sale has not been officially announced, CSG is definitely a stock to keep an eye on given the significant interest by private equity!

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Texas Pacific Land Trust (NYSE:TPL) shares opened even today after Mercury Real Estate Advisors disclosed an 8.1% stake in the company along with a letter to the board of directors in a Schedule 13D/A filing with the SEC. The Connecticut-based hedge fund asked that the company increase its buyback program and split its sub-shares on a further 10 for 1 basis in order to further unlock value for shareholders.

Mercury expressed their disappointment that the company only repurchased 3,800 shares in the first quarter of 2007 - a number that pales in comparison to the company's 9,000 share quarterly average between 2005 and 2006. This fact is especially disturbing given the fact that the company has $8 million in cash, $2 million in quarterly profits, and notes receivable of over $20 million. Spending only $6 million of this cash would result in over 28,000 shares repurchased!

Mercury also expressed their concern over the TPL's high share price. The stock is currently trading at $209 and has reached a high of $249 earlier this year. The hedge fund believes that the company should split the stock on a 10 for 1 basis to bring the shares to a more affordable $22 to $25 range. This would result in greater liquidity, which would be beneficial for all shareholders.

Overall, Mercury is confident in the company's overall business plan and valuable assets but believes that the stock price could be supported through these two measures. If the company institutes these changes, it could significantly enhance value. This makes TPL a stock worth watching!

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Dendreon Corporation (NDAQ:DNDN) shares moved up $0.27, or 4.42%, to $6.34 today after the company announced new study data on Provenge at the American Urological Association on Sunday. The company's board also agreed to layoff 40 workers in an effort to reduce its cash burn rate while it works towards FDA approval. The news comes after an extremely volatile couple of months for the company, whose shares ranged between $3.57 and $25.25.

The new study data on Provenge was disclosed in the abstract "Advanced Prostate Cancer Patients who Receive Sipuleuc-T followed by Docetaxel Have Prolonged Survival" authored by Daniel Petrylak, MD. According to Petrylak, the results of the 82-patient study have suggested that the use of Provenge as a first-line treatment followed by chemotherapy docetaxel upon disease progression may provide patients with substantially prolonged survival benefits.

Dendreon also has strong support from patients who have begun lobbying the FDA to get Provenge approved. In fact, a small group of prostate cancer patients are meeting the FDA Commissioner during the next few months to discuss the matter. Meanwhile, they have setup ProvengeNow.org in an effort to attract further interest from patients to help their cause.

Many doctors that attended the American Urological Association's meeting today (during which Provenge was supposed to be launched) also indicated their disappointment. Many of their patients had been anticipating the new drug and were extremely disappointed when the FDA decided to delay their ruling by several months to a year. Whether or not any of these efforts materialize in the form of a quicker approval remains to be seen; however, DNDN is definitely a stock with great upside potential once Provenge hits the market. Combined, these factors make DNDN a stock worth watching!

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Alltel Corporation (NYSE:AT) shares moved up $4.70, or 7.21%, to $69.91 today after the company received a $27.5 billion buyout offer from TPG Capital and Goldman Sachs Capital Partners. The $71.50 buyout comes after speculation that we recently noted in our article All Eyes on an Alltel Buyout. The premium represents a 9.6% premium to Friday's close and a 23% premium to the stock's price before buyout speculation first began in late December.

This price is likely to be viewed by shareholders as too low given the high premiums seen in other recent buyouts. Over the last six months, Alltel shares are up 15% while competitors Verizon and AT&T moved up 20% and 25%, respectively. In fact, even after the buyout Alltel shares will only be up 4% over the past 52 weeks! And finally, Alltel's strong cash flows and unique market position give it a very competitive stance as the 5th largest wireless provider in the United States.

So, is the buyout too small? Well, it is worth noting that Alltel's valuation before the buyout rumors was already significantly higher than its peers. The company's PEG (PE/Growth) ratio stands at a high 2.90 while it trades at just about enterprise value. In the end, it is uncertain whether or not the company will receive a higher bid, but AT is definitely a stock to watch in the meantime!

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aQuantive, Inc. (NDAQ:AQNT) shares jumped over 77% today after Microsoft Corporation (NDAQ:MSFT) agreed to purchase the company for about $6 billion, or $66.50 per share. The buyout price represents an amazing 85% premium over Thursday's $35.87 close!

The large offer reflects the increasing competition between the large Internet companies in the lucrative online advertising marketplace. Many investors pegged aQuantive or ValueClick as potential takeover candidates after Google's acquisition of DoubleClick and Yahoo's subsequent acquisition of Right Media.

These transactions leave ValueClick as the only remaining large independent advertising broker, which caused the shares to jump more than 7% despite an investigation into the company that was disclosed today. Some analysts see further consolidation, perhaps by Yahoo to further boost its offerings. Regardless, ValueClick and this entire industry are certainly worth watching!

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Pioneer Bankshares (OTC:PNBI) shares moved up marginally this week after Richard Spurzem disclosed a 5.2% stake in the company and a letter to the company's board of directors. The shareholder suggested that Virginia-based company has limited growth prospects and should put the company up for sale.

What evidence suggests that any sale would be successful? Well, the company operates Pioneer Banks in Virginia and may be attractive to any larger banks seeking to "fill out" their branch footprint in Central and Western Virginia. Moreover, the recent sale of Premier in the upper Shenendoah Valley I-81 corridor and Union Bank's purchase of six branches from Provident.

Mr. Spurzem had requested to meet with management several times and only recently received a response from the company indicating that they would speak with him after the company's next board meeting. Whether or not the company would be open to a possible sale or interested in engaging a financial advisor remains to be seen; however, this is definitely a stock to keep an eye on in the meantime.

Note: This is an OTC stock, meaning that it is not as liquid as many stocks traded on the NYSE, NASDAQ or AMEX. On the flip side, being an OTC company saves million in public company expenses which helps a company with a $24 million market cap.

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Midwest Air Group (AMEX:MEH) and AirTrans Holdings (NYSE:AAI) shares both rose more than 2% today as the companies prepare to battle during Midwest's upcoming annual shareholders meeting over a proposed hostile takeover. The fight promises to be an interesting one since the Wisconsin-based carrier faces strong shareholder support to the merger.

The company revealed today that 56.6% of the total outstanding shares were tendered in favor of the deal; however, they remain armed with a poison pill and a Wisconsin law that allows companies to consider not only shareholders but also all constituent interests when considering a merger. In the end, these ensure that no deal is possible without board support, and that will depend on AirTrans' success on June 14th.

Midwest has also made things complicated for AirTrans even if they do successfully take over the company. The carrier announced a partnership with Northwest today that will add 250 city pairs and more than 1,000 flight options for the customers of both airlines. These new routes will greatly expand routes for Midwest as an independent company but may end up conflicting with AirTrans routes while supporting their competition. Regardless, this is definitely a situation worth following...

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SunTrust Banks Inc. (NYSE:STI) shares continued their move up this week after the Wall Street Journal reported that the bank could become a buyout target now that it has shed its Coca Cola (NYSE:KO) holdings. The company had avoided such talks in the past using its KO holdings as a pseudo-poison pill, but now a sale of the eighth largest U.S. bank doesn't seem so distant from many analysts and investors.

Is there any evidence to support the theory? Well, according to the WSJ, executives at the company maintain that the company can keep going it alone, but outsiders say that evidence is mounting that selling out is an option being considered by directors. In fact, management announced Monday that it sees few acquisition opportunities. Instead, the proceeds of the KO sale will be used to fund a share buyback. Combined, these are all good indications that the company is keeping itself cheap, meaning that an acquisition is definitely not out of the cards. This is definitely a stock to watch!

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BB&T Corporation (BBT)

The New York Times Company (NYSE:NYT) moved down marginally today after reporting April sales 2.2 percent lower on weakness in all of its print media groups. Ad revenues dropped 3.6 percent from $203.4 million to $196 million while total revenues dropped from $303.2 million to $203.4 million. Analysts and investors continue to attribute the drop to an overall decline in the print advertising market as more and more users turn to online sources for their news and information.

This thesis is confirmed when we look at the company's internet sales, which climbed 15.6 percent in all three groups. Moreover, it's About.com segment saw its ad revenues soar 26.6% to $187.1 million. It is worth noting, however, that even these growth rates are much lower than other large web properties. The NYT has the 11th largest presence on the web and if it does not quickly act to extract more revenue and greater growth figures, it may fall behind in that arena too.

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Riviera Holdings (AMEX:RIV) shares jumped earlier this week after the Las Vegas-based company announced that it had began to receive bids in connection with its sale process. The process comes after activist shareholders had pressured the company via a proxy solicitation to take actions to unlock shareholder value.

Currently, a $30 per share offer from a group led by Ian Bruce Eichner and Dune Capital Management is the best bid but there are many other potential bidders. In fact, Flag Luxury - the hedge fund that previously pushed for a sale - said yesterday that their group is currently considering all of its options, which may include making a higher offer than the $30 per share expression of interest that the board announced on May 11th.

Many shareholders are hoping that Flag Luxury will utilize their existing position as largest shareholder as leverage to make a higher bid for the company. Ideally, this could spark a bidding war that could propel the stock significantly higher than $30 per share. And given the M&A in the gaming sector by private equity not so long ago, this may be a strong possibility. Regardless, this is certainly a stock worth keeping an eye on!

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Feldman Mall Properties (NYSE:FMP) shares rose $0.21, or 1.87%, to $11.29 today after Mercury Real Estate Advisors disclosed a 9.5% stake in the company and demanded that the company immediately engage a financial advisor to assist the board in putting the company up for sale.

The Connecticut-based hedge fund insisted that the company continues to trade at a deep discount to its liquidation value, which is being eroded by an ineffective management team that has delivered a total return of only 1.9% for shareholders since the company's IPO. Moreover, the company's G&A expenses are far too high a percentage of revenues to justify the company remaining public - that is to say, significant cost savings could be achieved by any buyer simply by taking the company private or leveraging economies of scale.

Mercury also noted that the company has failed repeatedly to meet routine SEC reporting timetables, repeatedly disappointed on earnings and cash flow projections and recently completed a dilutive financing. These failures are especially embarrassing given the company's relatively straightforward business operations, which entail owning a mere seven retail properties! Consequently, the hedge fund requested a meeting with the board of directors to discuss this dire situation and recommend that the company hire and investment banker to explore a possible sale of the company.

Unfortunately, the board of directors has not been so open to these suggestions to date. In fact, this is the third time that Mercury has sent a letter to the board of directors via a Schedule 13D filing - the other two times being in January and March. Apparently, the company's board and management are more concerned about protecting their own jobs than unlocking value for shareholders - a stance which is not uncommon in today's world. Mercury may be forced to threaten a proxy fight or take further action before any kind of a response can be solicited from the company or board. Regardless, this is definitely a stock to keep an eye on as any sale would come at a substantial premium to the current market price!

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SunTrust Banks (NYSE:STI) shares dropped over one percent today after the company announced several initiatives to enhance shareholder value, concluding its process of exploring various "value initiatives". These initiatives are focused in three areas: efficiency and productivity, SunTrust's ownership of Coca-Cola common stock and capital optimization/balance sheet management.

SunTrust's primary objective is to sell its stake in Coca-Cola, which is one of the largest components of its portfolio. The company then plans to use that money to repurchase $750 million to $1 billion of their own stock during the rest of 2007. Through a combination of its previously announced 20% dividend increase and anticipated share repurchases, the company expects to return over 90% of its earnings to shareholders in 2007!

SunTrust also expects its cost cutting efforts to result in an annual gross cost savings for 2009 of $530 million - nearly 50% greater than its original estimates. Additional efficiency and productivity improvements may also make their way to the company's bottom line by 2009.

While many shareholders were clearly hoping that this process would result in a sale of the company (that's why its down today), 90% of earnings being returned to shareholders is certainly nothing to complain about! STI is a stock worth watching closely over the next year as they begin to execute their plan...

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Ceridian Corporation (NYSE:CEN) shares moved down marginally today after the company said it fired Comdata executive Gary Krow for disclosing confidential information to activist hedge fund Pershing Square. Ceridian said it learned about the violation through testimony in the company's lawsuit with the hedge fund, but Pershing Square continues to insist that it did not receive any confidential information concerning the company or its affiliates.

Gary Krow wasn't the only executive fired either - just a few months earlier the company terminated CFO Doug Neve. Interestingly, both of these executives hand delivered written letters to the company's board criticizing senior management. Shortly after these letters were received, Chairman and CEO Ronald Turner announced his resignation. Meanwhile, almost all of these key positions were filled with ex-GE employees - a troubling trend among management and the board.

This mysterious series of events prompted Pershing Square to sue the company in an effort to obtain these letters to management. The letters could not only provide very material information that shareholders deserve, but also information that could be used in a potential proxy solicitation if the hedge fund decides to try and replace the board. Unfortunately, the courts ruled on Friday in favor of Ceridian. Apparently, owners do not have the right to view management conversations...

Pershing Square was initially just seeking a spin-off to unlock value in the company's Comdata division and prevent an acquisition-based strategy, but their involvement has since brought to light an apparent host of other problems with the company's board and management. The secretive letters not only prompted the resignation of the company's CEO, but also spawned a probe by the SEC into the company's ethics policies.

Finally, to compound the problems at Ceridian, the company failed yet again to set a record or meeting date for the annual shareholders meeting, which makes it impossible for shareholders to express their views and make changes to the company they own. When the date is finally set, the company will be in for a fight. Pershing Square reportedly obtained documents from Krow outlining lists of shareholders that would support him and his goals to spin-off Comdata. Combined, these factors