Chapman Capital Wants Cypress Semi (CY) to Split Off SunPower (SWPR), LBO for Core Biz

Activist hedge fund Chapman Capital sent a letter to the board of Cypress Semiconductor (NYSE: CY) recommending the company reorganize via a split-off of its controlling stake in SunPower (Nasdaq: SPWR) and subsequent going-private LBO transaction of the core semiconductor business. More at 13D Tracker

UPDATE: Stifel Nicolaus Sees Possibility of Bidding War for Alltel (AT)

UPDATE: Stifel Nicolaus comments on the WSJ story suggesting private equity firms are beginning to circle Alltel (NYSE: AT). The firm notes that a buyout has been a key part of their thesis since the spin-off of the company's wireline assets earlier this year. The firm says the company is a very attractive acquisition target for either private equity, or a strategic player such as Verizon Wireless (NYSE: VZ) (NYSE: VOD) or Sprint Nextel (NYSE: S).

The firm said a possibility exists of a potential bidding war between interested parties and believes valuations could climb to as high as $85/share in a competitive bidding environment.

The firm maintains its Buy rating and $68 price target and said the stock remains its top US-based stock.

Hutchison Telecommunications (HTX) Confirms It Has Been Approached Regarding a Sale of Its Interest in Hutchison Essar Limited

In a 6-K, Hutchison Telecommunications International Ltd. (NYSE: HTX) noted the recent increase in the price of its shares and stated that it is not aware of any reasons for such increase other than as may relate to market speculation on a possible sale of its equity interests in Hutchison Essar Limited.

The company noted that while it has been approached by various potentially interested parties regarding such a sale, no agreement has been entered into up to the date of this announcement. There is no assurance that a sale may result from these approaches.

Private Equity Firms Looking at Alltel (AT) - WSJ

According to reports from the Wall Street Journal, private equity firms are looking at Alltel Corp (NYSE: AT) as a possible takeover target. According to the report, the balance-sheet strength would give buyers room to load up debt. The size of the deal would be large - with the currently market value of Alltel at $21.7 billion.

A potential strategic buyer for Alltel could be Verizon Wireless, a joint venture of Verizon Communications Inc. (NYSE: VZ) and Vodafone Group PLC (NYSE: VOD). Link to Article $

Applebee's (APPB) and Wendy's (WEN) Mentioned As Takeover Targets on CNBC

On CNBC, a WSJ editor commented on possible restruant LBO targets for 2007 following the 15 restraunts buyouts in 2006 and the recent successful IPOs for Burger King (NYSE: BKC) and Chipotle Mexican (NYSE: CMG). Targets mentioned inlcude Applebee's (Nasdaq: APPB) and Wendy's (NYSE: WEN)

Link to CNBC Video

Rumor DG FastChannel (DGIT) Could Buy Point.360 (PTSX) Following Buying Large Stake

Point.360 (Nasdaq: PTSX) is up 37% after DG FastChannel (Nasdaq: DGIT) bought 1.1 million shares of the company at a healthy premium from large shareholder Midwood Capital. It would seem DGIT could be targeting PTSX for a takeover. More at 13DTracker

Oil/Gas Takeover Targets Mentioned on CNBC: UPL, CXG, XTO, EOG, RRC, OXY

Analyst on CNBC discusses possible takeover targets in the oil/gas sector for 2007. Ultra Petroleum Corp. (AMEX: UPL), CNX Gas Corporation (NYSE: CXG), XTO Energy Inc. (NYSE: XTO), EOG Resources, Inc. (NYSE: EOG), Range Resources Corp. (NYSE: RRC), Occidental Petroleum Corp. (NYSE: OXY).

Link to CNBC Video

Reports Willis Group (WSH) Still Interested in Buying Marsh & Mclennan (MMC)

According to reports from the New York Times, Willis Group Holdings Ltd. (NYSE: WSH) is still interested in acquiring larger rival Marsh & Mclennan Companies Inc. (NYSE: MMC). The article notes that even though Marsh & Mclennan said it is not interested in a takeover, Willis Group's CEO Joseph Plumeri has not given up on his plan for a merger of the two companies. Sources briefed on the plan say Plumeri has the backing of Kohlberg Kravis Roberts (KKR), the buyout firm which briefly owned the company.

Claire's Stores (CLE) option implied volatility of 25 at low end of Range

Claire's Stores (NYSE: CLE) : CLE operates 2,878 stores for pre-teens & young adults. CLE closed at $33.27. Women's Wear Daily reported on 12/11/07 CLE entered a second round of bidding for its assets. CLE over all option implied volatility of 25 is below its 6-month average of 30 according to Track Data, suggesting decreasing risks. Paul Foster

Bisys (BSG) Considering a Management-Led Buyout - FT.com

According to reports from FT.com, Bisys (NYSE: BSG) is considering a management-led buyout and has hired Bear Stearns to evaluate strategic options. The report noted that Bisys recently settled SEC fraud charges.

The article also noted a recent Jefferies report suggesting the best path for Bisys would be a takeover and a price of $13 or above would be justified.

Ford Motor (F) Slightly Higher On Reports of Meeting with Toyota

Shares of Ford Motor Co. (NYSE: F) are slightly higher in afternoon action Tuesday on reports from Nikkei that CEO Alan Mulally met with Toyota Motor's (NYSE: TM) Chairman Fujio Cho last week about a possible partnership. The meeting was reportedly related to alternative energy vehicles. Ford declined to comment on the reports.

Shanda (SNDA) Higher on Rumors Google May Buy Qidian for $400-$600M

Shanda Interactive (Nasdaq: SNDA) is higher today on rumors Google (Nasdaq: GOOG) may be interested in buying Chinese literature site Qidian (www.cmfu.com) owned by Shanda for between $400-$600 million. According to Bloomberg, a Shanghai-based spokesman for Shanda denied the report.

Shares of Shanda are 6.9% to $21.38 in mid-day action.

Rumored Takeover Targets for 2007

Based on our analysis of rumors over the past 6 months, here are the top 25 "rumored" takeover targets entering 2007. The analysis was based on rumor mentions, source of mention (industry analysts or well placed source would score higher than a unanamous rumor), and strength of rumor.

This is our first time doing this, so there is no history of how well the list could do and as we state in the title - NEVER BUY A STOCK ON A RUMOR!

Sepracor, Inc. (Nasdaq: SEPR)
RadioShack (NYSE: RSH)
Citrix Systems, Inc. (Nasdaq: CTXS)
Business Objects SA (Nasdaq: BOBJ)
EMC (NYSE: EMC)
Kimberly-Clark (NYSE: KMB)
Apache Corp. (NYSE: APA)
KB Home (NYSE: KBH)
Borders Group, Inc. (NYSE: BGP)
Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT)
Genesis Microchip Inc. (Nasdaq: GNSS)
Imclone Systems Inc. (Nasdaq: IMCL)
Smith & Nephew plc (NYSE: SNN)
XM Satellite Radio Holdings Inc. (Nasdaq: XMSR)/Sirius Satellite Radio (Nasdaq: SIRI) merger
Guitar Center Inc. (Nasdaq: GTRC)
Foot Locker Inc. (NYSE: FL)
Forest Laboratories Inc. (NYSE: FRX)
BEA Systems Inc. (Nasdaq: BEAS)
TIBCO Software Inc (Nasdaq: TIBX)
Tellabs Inc. (Nasdaq: TLAB)
Health Net Inc. (NYSE: HNT)
Nabors Industries Ltd. (NYSE: NBR)
Cyberonics Inc. (Nasdaq: CYBX)
Louisiana-Pacific Corp. (NYSE: LPX)
Nektar Therapeutics (Nasdaq: NKTR)

Here are some others that are not so much rumored targets but have put for sale signs up, were for sale in the past or are getting pushed by shareholders to sell:

Brinks Co. (NYSE: BCO)
Catalina Marketing Corp. (NYSE: POS)
Griffon Corp. (NYSE: GFF)
Cost-U-Less, Inc. (NASDAQ: CULS)
MedImmune Inc. (Nasdaq: MEDI)
Salton Inc. (NYSE: SFP)
World Air Holdings, Inc. (OTC: WLDA)
Southern Union Company (NYSE: SUG)
Pogo Producing Co. (NYSE: PPP)
Northwest Airlines Corp. (OTC: NWACQ)
Mills Corp. (NYSE: MLS)
CSK Auto Corp. (NYSE: CAO)
Steris Corp. (NYSE: STE)
Quipp, Inc. (NASDAQ: QUIP)
InFocus Corporation (Nasdaq: INFS)
Emmis Communications Corp. (Nasdaq: EMMS)
Finish Line Inc. (Nasdaq: FINL)
Glenayre Technologies, Inc. (Nasdaq: GEMS)
Great Wolf Resorts Inc. (Nasdaq: WOLF)
Herley Industries, Inc. (Nasdaq: HRLY)
Houston Exploration Co. (NYSE: THX)
North Pittsburgh Systems Inc. (Nasdaq: NPSI)
Sunterra Corporation (OTC: SNRR)
Vitesse Semiconductor (OTC: VTSS)
Inter-Tel Inc. (Nasdaq: INTL)
Zale Corp. (NYSE: ZLC)
Millicom International (Nasdaq: MICC)
R.R. Donnelley & Sons Company (NYSE: RRD)

Takeover Speculation Continues to Surround Kimberly-Clark (KMB)

According to various reports, Kimberly-Clark Corp. (NYSE: KMB) call options were active yesterday on speculation the company could be a takeover target.

Kimberly-Clark has been seen as a takeover target since the 2005 buyout of competitor Georgia Pacific. Merrill Lynch has Kimberly-Clark on the top of their list of possible takeover targets.

The common stock of KMB is lower today, giving back most of yesterday's small gains.

Napster (NAPS) To Be Bought at 100%+ Premium?

A new StreetInsider contributor, StockMasters.com, has an interesting analysis of Napster (Nasdaq: NAPS), which put itself up for sale in September. StockMasters said under one scenario the company could be bought for $7.50-$8.50. Another scenario suggests the company could show better-than-expected results. The doomsday scenario would be marked by no sale and the market being flooded with cheaper music services. The stock is currently at $3.67. Link to Article

Merrill Mentions HLT and OEH As Takeover Targets

According a post from the New York Times' DealBook blog, Merrill Lynch analyst David Anders mentions Hilton Hotels (NYSE: HLT) and Orient-Express Hotels Ltd. (NYSE: OEH) as possible takeover targets in the lodging sector following past deals including Four Seasons and Fairmont. Link

TNS Receives $20 Takeover Offer from Founder and Former CEO

TNS, Inc. (NYSE: TNS) is 13% higher to $19.37 after the company received a $20 offer from founder and former CEO John J. McDonnell, Jr. The company said it will review the offer. Some think the offer could go higher. More at 13DTracker

Smith & Nephew (SNN) Higher As Takeover Speculation Grows

Smith & Nephew plc (NYSE: SNN) is 3% higher in early action on growing takeover speculation. According to reports, the private equity group that bought Biomet, Inc. (NASDAQ: BMET) could also target Smith & Nephew. The group was made up of Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG.

Smith & Nephew and Biomet were engaged in merger talks prior to the private equity group deal.

Cramer Mentions AGN for ELOS Rumors on Mad Money

Touting Syneron Medical Ltd. (Nasdaq: ELOS) on Mad Money Wednesday night, Jim Cramer mentions rumors Allergan Inc. (NYSE: AGN) could buy the company. Cramer was positive on the stock mainly due to valuation and an upcoming dental laser product, but did mention the chatter.

Maxim Integrated (MXIM) Higher On Takeover Talk Following CEO Retirement

Maxim Integrated Products, Inc. (Nasdaq: MXIM) is higher today following news Maxim's founder and CEO, John (Jack) Gifford, retired for health reasons. Speculation is now swirling the company could be takeover bait.

Online Advertising Firms Higher on Digitas (DTAS) Takeover

Online advertising firms 24/7 Real Media (Nasdaq: TFSM), ValueClick (Nasdaq: VCLK), AQuantive (Nasdaq: AQNT) are moving higher midday following the buyout of Digitas Inc. (Nasdaq: DTAS) for $13.50 per share by Publicis Groupe SA (NYSE: PUB)

Redback (RBAK) Takeover Rumors Prove True, Ericsson Pays $25/Share

As had been rumored (and rejected by analysts) Redback Networks Inc. (NASDAQ: RBAK) announced a definitive agreement to be acquired by Ericsson (NASDAQ: ERIC) for $2.1 billion or $25 dollars per Redback share. The stock closed at $21.17 today.

NOTE: Today RBC analyst Mark Sue downgraded the stock, citing 'limited upside' and claiming a takeover was 'unlikely'. OUCH - BAD CALL

ElkCorp (ELK) Higher on Rumors of New Bid

Shares of ElkCorp (NYSE: ELK) are now $2.80 above the $38 bid the company accepted from The Carlyle Group. Rumors is strategic buyer Building Materials Corporation of America is reworking its past $35 bid for the company.

Reports Harrah's (HET) Deal Done at $90

Reports the Harrah's Entertainment Inc. (NYSE: HET) deal is done. According to the Wall Street Journal, Apollo Management and Texas Pacific Group will pay $90 per share for the casino operator. WSJ Link $

RBC Capital Downgrades Redback (RBAK), Says Takeover Not Imminent

According to Barron's Tech Trader blog, RBC Capital cut its rating on Redback Networks (Nasdaq: RBAK) today from Outperform to Sector perform, citing valuation. The analyst also said they do not believe a takeover is imminent.

The analyst said Cisco (Nasdaq: CSCO) and Juniper (Nasdaq: JNPR) are unlikely suitors given product overlap, Alcatel-Lucent (NYSE: ALU) is working on an improved switch fabric and Motorola (NYSE: MOT) may have its hand full. Link to Barron's

Brink's (BCO) Gets More Pressure From Holders for a Sale

The Brink's Company (NYSE: BCO) is higher after large shareholder, MMI Investments, said it will supports Pirate Capital's proposal that the company immediately engage an investment banking firm to explore all strategic alternatives, including a possible sale. More at 13DTracker. Link

Former Cendant Parts Wyndhan (WYN) and Avis Budget (CAR) Higher Following Realogy Buyout

Spin-offs of the former Cendant, Wyndhan (NYSE: WYN) and Avis Budget Group, Inc. (NYSE: CAR), are seeing interest today following the private equity buyout of Realogy Corporation (NYSE: H), another piece of the former Cendant.

Talk on the street is private equity firms are also crunching the numbers on takeovers of these former Cendant units.

Imclone (IMCL) Higher on Takeover Chatter

A CNBC commentators suggests the 2% move higher in Imclone Systems (Nasdaq: IMCL) is related to renewed takeover speculation.

Mamma.com (MAMA) Continues Recent Move

Mamma.com Inc. (Nasdaq: MAMA) is continuing last week's momentum despite word Mark Cuban denied rumors he was buying a position in the company again after selling out in 2004.

According to a posting at RealMoney.com Friday, Hal Uy said, Cuban responded to his e-mail on the rumor saying, "Nonsense. No Chance. Won't happen."

Shares of Mamma.com are 13% higher in early action today after running up from $2.37 since last Tuesday on news of the launch of its new video search, and extending gains Friday on the Cuban rumor.

Compuware (CPWR) Seen As a Takeover Target - TheDeal

According to reports from TheDeal.com (subscription required), Compuware Corp. (Nasdaq: CPWR) is being viewed as a potential takeover target. According to industry analysts, a merger with BMC Software (NYSE: BMC) is not out of the question.

Cramer Thinks Alcoa (AA) Gets Bought in 2007

On CNBC, Jim Cramer said he would be surprised if Alcoa (NYSE: AA) remains a public company in 2007, implying the company will gets taken over. He also said the same thing regarding Honeywell International (NYSE: HON).

Apollo and Texas Pacific Set to Win Harrah's (HET) Auction With $90+ Bid - WSJ

According to reports from the Wall Street Journal Sunday, the private equity team of Apollo Management and Texas Pacific Group are set to win the auction for Harrah's Entertainment (NYSE: HET), with an offer of at least $90 per share.

The article said while a last minute hiccup could still derail the deal, an announcement is expected on Monday.

Wedbush Said Genesis Microchip (GNSS) Biz Will Likely Remain Sluggish in Q1, Sees As Possible Takeover

In a note today on Genesis Microchip (Nasdaq: GNSS) Wedbush Morgan said checks suggest the company's business will likely remain sluggish in Q1 with a near-term snap back in revenues seemingly unlikely. The firm also said even with the low valuation, they remain on the sidelines citing a deteriorating design win picture for 2007, and their concerns about significantly more competition in the DTV chip market in 2007.

The firm does not recommend shorting the stock given that Genesis could be an acquisition target.

The firm maintains their Hold rating and $11 price target.

Mamma.com (MAMA) Sees Upside Action on Cuban Rumor

Today's continued run-up in shares of Mamma.com Inc. (Nasdaq: MAMA) is being attributed to rumors earlier in the day that billionaire Mark Cuban is buying the stock again after selling his original stake back in 2004.

Shares of Mamma.com are up significantly this week following news the company launched its new video search engine.

We are now hearing that Cuban could be denying today's rumors, although we've seen nothing on any of the wire services suggesting this is the case.

NOTE: It is our personal opinion that it would be more likely that Cuban would be short the stock versus buying it after the recent run-up. Cuban is also known for being tech savvy, an area Mamma.com continues to lag.

Street Waits on Harrah's (HET) Bid News

The street is still waiting on a decsion from Harrah's Entertainment Inc. (NYSE: HET) related to buyout bids for the casino company.

According to reports from the Wall Street Journal today, Penn National Gaming (Nasdaq: PENN) made a competing offer to the bid from private equity groups Texas Pacific Group and Apollo Management, which earlier in the week was raised to $87.

J C Penney (JCP) Higher on Renewed LBO Talk

J C Penney Corporation, Inc. (NYSE: JCP) is higher today on renewed LBO rumors.

Cramer Doubts Lampert Would Buy Gap (GPS)

Commenting on renewed speculation that hedge fund guru and Chairman of Sears Holdings (Nasdaq: SHLD) Eddie Lampert may try to buy Gap Inc. (NYSE: GPS), Jim Cramer, at RealMoney.com said, "Eddie has poached the best people from Gap over the years. I doubt he would want to buy the company when he can buy the people." Cramer suggests the rumors are being floated by bears in Sears Holdings.

Shares of Gap are up 2.7% today after the rumors were discussed at industry publication, Women's Wear Daily (WWD.com).

Worthington Industries (WOR) Higher on Mittal Takeover Speculation Following Analyst Note

Shares of Worthington Industries (NYSE: WOR) are higher in early action today following a note from Prudential calling the company a possible takeover target from Mittal (NYSE: MT). The analyst placed 10-20% odds on Mittal bidding $35 to $45 for Worthington.

Shares of Worthington Industries are 11.7% higher to $20.43 in early action today.

Jefferies Comments on SiRF (SIRF) Says TomTom Second Source is No Longer Just a Rumor

In a researh report this morning, Jefferies said rumor that TomTom is using a second source besides SiRF Tech (NASDAQ: SIRF) for GPS chipset is no longer just a rumor. Jefferies said their checks suggest TomTom has selected privately held Global Locate as a second source.

Gap (GPS) Higher on More Lampert Speculation

Specialty retailer Gap Inc. (NYSE: GPS) is higher this morning on reports from Women's Wear Daily (WWD.com) the speculation that hedge fund billionaire Edward Lampert is looking to takeover the company won't die down.

Shares of Gap are 1.7% higher to $19.90 in early action.

Google For Tivo Rumor Makes The Rounds Again

The Google (Nasdaq: GOOG) / TiVo (Nasdaq: TIVO) partnership rumors we mentioned the other day continued today, following comments from Buisness 2.0 editor on CNBC. The editor said Google and Tivo are essentialy in the same business (helping people find want they want, without the clutter). He said Google could apply its ad model to monitize TiVo. The CNBC commentor on the segment mentions Intuit (Nasdaq: INTU) and Salesforce.com (NYSE: CRM) as other Google targets. Link to CNBC the Video

Harrah's Entertainment (HET) Sees Volatility Mid-Day on Rumors

Harrah's Entertainment Inc. (NYSE: HET) has seen some volatility mid-day today as rumors swirl the company could opt for a recapitalization versus a private equity buyout. A decision from the company is expected later in the week.

The latest reports suggested the private equity group of Apollo Management and Texas Pacific Group would raise their bid from $83.50 to $87. The stock is currently at $79.40.

MedImmune (MEDI) Holder Matrix Asset Advisors urges a sale of the company

According to headlines from Dow Jones News, MedImmune (Nasdaq: MEDI) holder Matrix Asset Advisors urges for a sale of the company.

Airlines Stock Take Flight on More Industry Consolidation News

Speculation in the airline sector is rampant today following news that UAL Corp (Nasdaq: UAUA), the parent of United Airlines, and Continental (NYSE: CAL) have held exploratory merger talks over the past several months, but talks have picked up recently following US Airways Group's (NYSE: LCC) recent hostile bid for Delta Air Lines Inc. (OTC: DALRQ). Link

In addition, AirTran Holdings Inc. (NYSE: AAI) confirmed it made an $11.25 per share offer for Midwest Air Group (NYSE: MEH), which was rejected. Link

Other stocks in the sector are also higher as industry consolodation takes shape: AMR Corporation (NYSE: AMR), Frontier Airlines Holdings, Inc. (Nasdaq: FRNT), JetBlue Airways Corp. (Nasdaq: JBLU), Northwest Airlines (OTC: NWACQ), Hawaiian Holdings Inc. (NYSE: HA), Alaska Air Group Inc. (NYSE: ALK)

Monarch Activist Partners Wants Cost-U-Less (CULS) To Sell

13DTrakcer reported that Monarch Activist Partners raised its stake in Cost-U-Less, Inc. (NASDAQ: CULS), and continued to urge the company to sell. LINK

Does Sabre Buyout Put PCLN and EXPE in Play?

With the private equity buyout of Travelocity parent Sabre Holdings Corp. (NYSE: TSG), takeover speculation on Priceline.com Inc. (Nasdaq: PCLN) and Expedia Inc. (Nasdaq: EXPE) is picking up.

The stocks are doing little today but you can expect more chatter on the names going forward as sector consolidation takes shape.

Today's Sabre deals follows news this summer that a Blackstone Group affiliate bought Cendant's Travelport, which operates Orbitz.com, for $4.3 billion.

Private Equity Group Expected to Raise Harrah's Bid to $87 - WSJ

According to reports from the Wall Street Journal, Apollo Management and Texas Pacific Group are expected to raise their bid for Harrah's Entertainment (NYSE: HET) from $83.50 to $87.

Final bids for Harrah's are due today and a decision from the company is expected later this week.

Shares of Harrah's closed at $79.74 on Monday.

Factory Card & Party Outlet (FCPO) Exploring Possible Sale

Factory Card & Party Outlet Corp. (NASDAQ: FCPO) said today it has initiated an external process to explore strategic alternatives which may include the potential sale of the Company. Link

Sabre Holdings (TSG) Bought By Private Equity Group

As was rumored, Sabre Holdings (NYSE: TSG) agreed to be acquired by Silver Lake Partners and Texas Pacific Group for $32.75 per share in cash. Link

Reports Terayon (TERN) Is a Takeover Target

Reports from Lightreading.com, Terayon Communication (OTC: TERN) is the target of a takeover bid, with Motorola Inc. (NYSE: MOT) and Cisco (Nasdaq: CSCO) said to be likely suitors. The report said Terayon could be bought for $225-$275 million in the next few weeks. Link

New River Pharmaceuticals (NRPH) Higher on Merger Chatter

New River Pharmaceuticals Inc. (Nasdaq: NRPH) is higher on talk the company may merge with UK specialty pharmaceutical company Shire plc (Nasdaq: SHPGY). The stock is 9% higher.

Gannett Co (GCI) Denies Report of Selling its UK Subsidiary Newsquest

Gannett Co. (NYSE: GCI) said there is no truth to the report in London's Sunday Express that Gannett is considering selling its UK subsidiary Newsquest. Newsquest is a valuable part of the Gannett company.

Citigroup Doesn't Think Altria (MO) Will Buy Gallaher, Sees Price Increase

Citigroup analyst, Bonnie Herzog, comments on Altria Group (NYSE: MO): "We, along with our global tobacco counterparts, believe the likely acquirer of Gallaher (NYSE: GLH) is Japan Tobacco. We do not believe Philip Morris Int'l will be involved with a bid for Gallaher, as it does not match the acquisition criteria for PMI. We increasingly believe Philip Morris USA will announce a price increase very soon. Based on conversations with our trade contacts, we anticipate a $0.10 per pack increase by PM USA, and anticipate the other manufacturers will follow. Also, we have been told by our contacts that PM USA will be introducing a new line extension on Marlboro, Marlboro Smooth. The line extension will be a menthol brand that will be positioned to directly compete with Newport."

Claire's Stores (CLE) Higher On Reports Takeover Getting Closer

Claire's Stores, Inc. (NYSE: CLE) is higher this morning following reports from Women's Wear Daily the company entered into the second round of bidding with offers said to be around $39 per share.

Earlier in the month, Claire's Stores said it was exploring strategic alternatives for enhancing shareholder value, including a possible sale of the company. The Company has retained Goldman, Sachs & Co.

Claire's Stores, Inc. is a leading international specialty retailer offering value-priced costume jewelry and accessories to fashion-aware tweens, teens and young adult females through its two store concepts: Claire's and Icing by Claire's.

Shares of Claire's Stores are 4.5% higher to $34.60 in early action.

Harrah's (HET) implied volatility at 19 as HET board expected to discuss Bids on 12/13

Harrah's (NYSE: HET) : HET is trading at $80.10 in pre-open trading, above its close of $79.59. The Wall Street Journal reported "HET plans to meet Wednesday to consider all buyout offers." HET option implied volatility of 19 is below its 6-month average of 23 according to Track Data, suggesting decreasing fluctuations. Paul Foster

Reports Taro Pharmaceutical (TARO) In Talks to Be Acquired

According to reports from Reuters, citing the Yedioth Ahronoth daily, Taro Pharmaceutical (Nasdaq: TARO) is in talks to be acquired by Ofer Hi-Tech Group. An offer for Taro could be worth $450 million.

Smith & Nephew Plans $11B Bid for Biomet (BMET)

According to reports from Reuters, Smith & Nephew Plc (NYSE: SNN) plans to offer $11 billion for Biomet Inc. (NASDAQ: BMET), citing unnamed sources familiar with the matter.

Bids are due Tuesday and others will also likely submits offers, the sources said.

Earlier in the month, Smith & Nephew confirmed that it has held very preliminary talks with Biomet.

Reports Sabre Holdings (TSG) Is Up for Sale

According to reports from the Wall Street Journal, Sabre Holdings Corp. (NYSE: TSG) has put itself up for sale, with private-equity groups seen as the most likely purchasers. Sabre Holdings could be acquired at a premium to its $3.75 billion market cap.

UPDATE: Catalina Marketing (POS) Confirms Offer, Goldman Hire

UPDATE: Catalina Marketing Corporation (NYSE: POS) confirmed that it has engaged Goldman Sachs & Co., as financial advisor, following receipt of an unsolicited expression of interest from a third party private equity firm with respect to the acquisition of the company.

The Company's board of directors formed a special committee which has authorized Goldman Sachs to solicit expressions of interest from other third parties and advise it with respect to the board's consideration of any expressions of interest and the advisability of pursuing a sale of the company.

UPDATE: Catalina Marketing (POS) Higher on Sale Report

UPDATE: A report from Reuters suggests Catalina Marketing (NYSE: POS) has hired Goldman Sachs to explore a sale of the company after it attracted private equity offers in the $30 per share range.
According to the report, which cited unnamed sources, six private equity firms were looking at the company.
Catalina Marketing offers behavior-based marketing programs for companies.
Shares of Catalina Marketing quickley rose 16% to $28.30 following the initial reports.

Catalina Marketing (POS) spikes higher on reports the company hired a banker for a sale

Catalina Marketing Corp. (NYSE: POS) spikes higher on reports the company hired a banker for a sale.

UPDATE: Citigroup Said CFO Rumor Not True, Won't Comment on Break-up Rumor - Bloomberg

UPDATE: Citigroup Inc. (NYSE: C) said CFO Sallie Krawcheck rumors are not true. Won't comment on break-up speculation - Bloomberg.

Citigroup (C) Higher on Management Shake-Up and Break-Up Rumors

Shares of Citigroup Inc. (NYSE: C) are 3% higher on rumors of a management shake-up and rumors the company could break-up into various companies.
There is market talk that Banc of America's departing CFO Molina could take the job at Citigroup. Recently rumors swirled that Citigroup's CFO Sallie Krawcheck was not happy with the job and was on her way out, although the company denied the reports.

Medicines (MDCO) Higher on Patent Rumor

Medicines Co. (Nasdaq: MDCO) is moving higher today on heavier-than-normal volume related to rumors of a positive patent decision. Shares of Medicines are 10% higher on volume that is already 8x normal.

Northwest Airlines (NWACQ) Hires Evercore for possible M&A Deal

Reports from Dow Jones News, Northwest Airlines Corp. (OTC: NWACQ) hires Evercore for possible M&A transaction.
Remember in the past, hedge fund Owl Creek Asset Management said NWACQ could be worth $19.75-$33.50 per share in a merger deal with Continental Airline (NYSE: CAL) LINK

CNBC Commentator Discusses Recent Buyout Rumors

CNBC commentator Joe Kernen commented on rumored takeover targets ahead of what could be another "Merger Monday". Kernen said the following names have been mentioned as takeover targets recently. Micron Technology (NYSE: MU), RadioShack (NYSE: RSH), Deere & Co. (NYSE: DE), Ingersoll-Rand Co. Ltd. (NYSE: IR), OSI Pharmaceuticals Inc. (Nasdaq: OSIP) and Gap Inc. (NYSE: GPS).

Merrill Lynch Analyst says Bank of America (BAC) Interested in Acquiring Barclays Bank (BCS)

Merrill Lynch analyst says Bank of America (NYSE: BAC) may be very interested in acquiring Barclays Bank (NYSE: BCS).

The analyst cites more international exposure in fixed-income, high yield, treasury management services, European credit card operations and other banking businesses.

Rumors Yahoo! (YHOO) May Buy Metacafe for $200M

According to TechCrunch.com, website Metacafe may be sold for between $200-$300 million and Yahoo (Nasdaq: YHOO) could be the buyer. Metacafe is a video sharing website that competes with Google's (Nasdaq: GOOG) YouTube.

TiVo/Apple Rumor? What About TiVo/Google?

The blogosphere is running wild with rumors Apple (Nasdaq: AAPL) will announce some type of licensing deal with TiVo (Nasdaq: TIVO) at MacWorld, which could be related to iTV. Link

Many are calling the deal unlikely.

We also heard Google (Nasdaq: GOOG) may look to partner with TiVo.

Shares of TiVo are down 4%, suggesting traders see little chance of either happening.

Does the News Corp/Liberty Asset Swap Deal Put EchoStar (DISH) In Play?

RealMoney.com options columnist Steven Smith suggests that News Corp's (NYSE: NWS) asset swap deal with Liberty Capital to send its DirectTV (NYSE: DTV) stake to Liberty return for Liberty's stake in News Corp could set the stage for a takeover of DirectTV rival EchoStar Communications (Nasdaq: DISH).

Smith said the deal will clean up the ownership structure of both NWS and DTV, leaving either to buy EchoStar. Smtih said Liberty could also buy DISH, to complement its European satellite business BSkyB.

In the past, AT&T (NYSE: T) was also mentioned as a possible buyer for DISH, which has long been a rumored target.

SIRI/XMSR Merger Rumors Continues to Buzz

Sirius Satellite Radio Inc. (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR) are both slightly higher today as the merger rumors won't die down, mainly due to comments the companies' management. Link

Analyst Said Zimmer Holdings (ZMH) Could Be a Buyout Target

In addition to talking about a Biomet (Nasdaq: BMET) buyout (mentioned earlier), The New York Times' DealBook blog notes that UBS analyst Kristen Stewart said Zimmer Holdings (NYSE: ZMH) might become a takeover target, with Medtronic (NYSE: MDT) mentioned as a possible buyer. Link

Gap (GPS) Higher on More LBO Chatter

LBO chatter is swirling around Gap Inc. (NYSE: GPS) again today, driving the stock 3.9% higher. We are also hearing chatter than an activist hedge fund may be accumulating a position.
NOTE: GPS has been mentioned as a takeover target for some time, but some analysts have said a deal is unlikely.

Rumors Apple's iPhone Will Be Delayed Until March

At RealMoney.com, Rev Shark mentions rumors that Apple's (Nasdaq: AAPL) iPhone will be delayed from January to March. NOTE: Apple hasn't even formally announced plans for iPhone.

Rev says he has a short position in Apple.

BioMarin (BMRN) Mentioned As Takeover Target

TheStreet.com columnist Marc Lichtenfeld mentions BioMarin (Nasdaq: BMRN) as an attractive acquisition candidate. Karen Andersen, an analyst with Morningstar, speculated that Genzyme (Nasdaq: GENZ) could be interested.

According to the report, the CEO said he opposes the idea of a takeover, but does acknowledge that they cannot remain independent forever. Link

Vanda Pharmaceuticals (VNDA) CEO Says Company May Be Acquisition Target By Big Pharma

Vanda Pharmaceuticals Inc. (Nasdaq: VNDA) made positive comments on its Phase III trial of Iloperidone antipsychotic drug on CNBC. The CEO also said that other pharmaceutical companies have expressed interest in acquiring VNDA because of its strong pipeline.

NOTE: VNDA is up 60% in pre-open action today on the Phase III news

Sanders Morris Harris Sees Takeover Potential in Ceragon Networks (CRNT)

Sanders Morris Harris initiates Ceragon Networks (Nasdaq: CRNT) with a Buy ratiing and $7 price target. The firm said the recent merger Stratex with Harris Microwave raises the takeover potential for Ceragon

Altria (MO): Won't Comment On Whether Gallaher (GLH) Of Interest - DJ

Altria (NYSE: MO): Won't Comment On Whether Gallaher (NYSE: GLH) of Interest - Altria: Doesn't Comment on 'Purely Speculative Matters' - Dow Jones

Note: Yesterday Gallaher Group confirms that it has recently received an approach which may or may not lead to an offer. Link

Eli Lilly (LLY) CEO Said It Does Not Plan to Raise ICOS Offer

On CNBC, commenting on the ICOS Corp. (Nasdaq: ICOS) takeover, Eli Lilly and Company (NYSE: LLY) CEO Sidney Taurel said its $32 offer is fair and full and it has no plans on raising it.
Shares of ICOS closed at $33.37 yesterday on expectations of an increased bid. Some shareholders plan to vote against the merger, saying it undervalues the company.

Stifel Nicolaus Sees Potential Change of Control at American Italian Pasta (PLB)

Stifel Nicolaus upgrades American Italian Pasta Company (NYSE: PLB) from Hold to Buy with a $12 price target, although they say major risks remain. The firm estimates that American Italian Pasta generated EBITDA in a range of $60 million to $65 million for the company's completed FY06 ended September 2006. The firm also believes operations have been greatly improved under the leadership of the management consulting / workout firm Alvarez & Marsal.

Analyst George I. Askew said, "We believe that a potential change of control could occur at American Italian Pasta over the intermediate term once the company re-files financial statements with the SEC. Importantly, affiliates of private equity group Sun Capital are believed to own over 13% of the company's shares and the short interest in the company's stock is estimated at 35% to 40% of shares outstanding.

UBS Says Biomet (BMET) Will Likely Be Bought

Biomet (Nasdaq: BMET) : BMET is a designer, manufacturer and marketer of joint replacement products. BMET hired Morgan Stanley-MS on 4/6/06 to help the company explore strategic alternatives. SNN said on 11/2/06 it held "very preliminary" talks with BMET. UBSW said today 'we think BMET is likely to be bought, but by whom?" BMET over all option implied volatility of 28 is below its 6-month average of 30 according to Track Data, indicating decreasing price risks. Paul Foster

News (NWS) Near Deal with Liberty Media - WSJ

Reports from the Wall Street Journal, News Corp (NYSE: NWS) is near a deal with Liberty Media (Nasdaq: LCAPA) to buy back Liberty's $11 billion stake. Liberty would get News Corp's 39% share of DirectTv (NYSE: DTV).

Gallaher Group Plc (GLH) Confirms Offer Speculation

Gallaher Group Plc (NYSE: GLH) notes the recent speculation concerning the possibility of an offer being made for Gallaher.

The Company confirms that it has recently received an approach which may or may not lead to an offer. The approach is preliminary and there can be no assurance that any offer will be made.

Credit Suisse Also Mentions Advance Auto Parts (AAP) and Guitar Center (GTRC) as LBO Targets

In addition to discussing Barnes & Noble Inc. (NYSE: BKS) as a possible LBO target, Credit Suisse also mentions Guitar Center Inc. (Nasdaq: GTRC) and Advance Auto Parts Inc. (NYSE: AAP) as possible targets.

The firm said in the past Guitar Center said it would be easier to manage the business as a private company and the company has held discussions with large shareholder Sageview Capital, which is run by two ex-stars at private equity giant KKR.

The firm said Advance Auto Parts makes the most sense in the do-it-yourself auto segment.

International Coal (ICO) Denies Takeover Rumors

International Coal Group, Inc. (NYSE: ICO) announced that while it normally does not comment on rumors, and it intends to continue this policy, the Company has become aware of specific newswire reports of rumors of a management leveraged buyout. International Coal Group denies these rumors.

Hansen Natural (HANS) Higher on LBO Rumor

Hansen Natural Corp. (Nasdaq: HANS) is seeing interest today on LBO chatter.

In the past, it was rumored that partner Anheuser-Busch (NYSE: BUD) could buy the company in a strategic deal.

The stock is 3.5% higher in mid-day action on volume that has already eclipsed the 3-month average.

Citigroup Said Deere (DE) Approached by Private Equity

Citigroup analyst, David Raso, comments on meeting with Deere & Co (NYSE: DE) management: "Discussion focused mostly on potential areas for acquisitions/business build outs given hugely strong balance sheet and on the sustainability of its strongly improving Shareholder Value Add metrics. However, some interesting color included CEO answering our questions acknowledging company has been approached by private equity to buy the company though management seemed to genuinely dismiss the potential for such an event."

"As well, somewhat disappointing when it comes to accounting earnings potential over the next 24 months is when we asked mgmt about its journey to continually reduce inventory in the channel and if production could stay below retail demand, mgmt noted that's possible."

Jefferies Said Perot (PER) Is an Attractive LBO Target

In a research note this morning, Jefferies & Co said excess balance sheet cash, solid cash flow, modest capex and attractive valuation would make Perot (NYSE: PER) an attractive LBO take-out.

Analyst Joseph A. Vafi said, "While we have no reason to believe that the company is currently engaged or interested in a buyout transaction, we feel that Perot's valuation and business model are appealing to private equity players. We feel that shares of PER would fetch $20-21 in such a transaction."

Timberland (TBL) Slightly Higher After Cramer Mentions Possible Takeover

Timberland (NYSE: TBL) is slightly higher this morning following a mention as a takeover target by Jim Cramer on Mad Money yesterday. Cramer said VF Corp (NYSE: VFC) may try to buy the company.

According to recent reports from the Wall Street Journal, Timberland hired Goldman Sachs to explore strategic options including a possible sale.

Shares of Timberland are 1.6% higher to $32.35.

Credit Suisse Sees Possible Barners and Noble (BKS) Takeover

Credit Suisse upgrades Barners and Noble (NYSE: BKS) from Underperform to Outperform citing valuation and likelihood of an LBO event.

Relational Investors Said No Deal with Banco Santander on Sovereign (SOV) Sale

Large Sovereign Bancorp Inc. (NYSE: SOV) holder Relational Investors disclosed a letter sent to Citigroup Michael Diana refuting speculation of a deal between Relational Investors and Banco Santander (NYSE: STD) on a sale of the company. More at 13DTracker Link

InterContinental (ICE) Higher on Renewed Takeover Speculation

Shares of InterContinental Exchange, Inc. (NYSE: ICE) are strong again today, in part related to renewed takeover speculation. Recently, NYMEX's (NYSE: NMX) said it won't rule out merger with ICE. Shares are 6.5% higher in mid-day action.

Soleil Securities Doesn't See Takeover of Lexmark (LXK)

In a note this morning on Lexmark (NYSE: LXK), Soleil Securities analyst Shannon Cross said they attribute the recent move in the stock to speculation the company could be the target of an LBO or strategic acquisition. The firm said they do not believe Lexmark is a takeover candidate at these levels and has difficulty achieving a current LBO-based stock price above $60 (Note: Current price is $70.55)

Ceradyne (CRDN) Higher on Takeover Speculation

Shares of Ceradyne Inc. (Nasdaq: CRDN) are higher today on takeover speculation. The stock up 3% in mid-day aciton.

Cramer Mentions Medtronic (MDT) for Cyberonics (CYBX) Rumors Again

At RealMoney.com, Jim Cramer says news from Medtronic Inc. (NYSE: MDT) that they are spinning-off their defibrillator unit to focus on treatments of chronic medial conditions could prelude a takeover of Cyberonics Inc. (Nasdaq: CYBX).

Cramer mentioned a possible takeover scenario of CYBX by MDT on Mad Money on 11/22.

Cyberonics has seen a notable run-up recently following the CEO's departure and a recent disclosure that activist investors Carl Icahn accumulated a position in the company.

Baidu.com (BIDU) Higher Following Note on Possible Microsoft Deal

Shares of Baidu.com, Inc. (Nasdaq: BIDU) are higher this morning after Piper Jaffray said the company could announce a deal with Microsoft that will include China Netcom and China Telecom shortly. BIDU is 6% higher in early action.

Cowen Says Use Takeover Rumor Run-Up to Exit COGN and BOBJ

Cowen downgrades Cognos (Nasdaq: COGN) from Outperform to Neutral, citing valuation after takeover speculation run-up. The firm sees limited upside in a takeover, but significant downside if a takeover doesn't materialize.

The firm makes similar comments on Business Objects SA (Nasdaq: BOBJ), saying the run-up on takeover speculation provides a nice exit opportunity.

WR Hambrecht Said Pfizer (PFE) May Buy Nektar (NKTR) Following Torcetrapib Blow-Up

Commenting on Nektar Therapeutics (Nasdaq: NKTR), WR Hambrecht said with Pfizer's (NYSE: PFE) loss on torcetrapib NKTR's stargegic value rises.

The firm said, "While our fundamental analysis of NKTR shares on rapidly improving Exubera visibility over the next few months remains unchanged with our target price of $30, the news of Exubera partner Pfizer's most visible late stage pipeline product which was touted as the next Lipitor to reach the market in the next few years at its annual R&D day last Thursday is nothing less than shocking and raised the obvious question: What can PFE do to close this strategic gap where some $10B in future potential revenues is suddenly removed from everybody's models. In our view, Pfizer senior management is now more likely to look outside the company for growth which should include potential acquisitions that will increase earnings in the 2008 + timeframe. As we have opined in the past, NKTR captures about half of Exubera earnings which looking out to 2010 represent about 30% in operating income or around $300M of the projected $600M of $2B worldwide Exubera sales (PFE's guidance has been north of $2B by 2010). Valuing NKTR via discounting 2010 earnings ($2.00) or the NPV of PFE's lost Exubera earnings it would have by owning NKTR, we estimate NKTR value to PFE at $35 to $40 which does not include a potential premium for NKTR's pipeline which now has 10 products in clinical trials or the potential strategic value of a San Francisco Bay Area footprint to amplify PFE's R&D capability which judging from the news out this morning may be more productive externally than what has been coming out of Groton, CT."

Boyd Gaming (BYD) Higher Following Station Casinos' (STN) Takeover Offer

Shares of Boyd Gaming Corp. (NYSE: BYD) are 6% higher in early action following news this morning that a management-led group offered to buy Station Casinos, Inc. (NYSE: STN) for $82 per share.

STN and BYD had been seen as the next gaming companies to go.

Takeover speculation in the group has been rampant since Harrah's Entertainment (NYSE: HET) received a $15 billion buyout proposal from private equity firms Apollo Management and Texas Pacific Group in October.

ISIS Pharmaceuticals (ISIS) Higher Following Negative Pfizer News

ISIS Pharmaceuticals Inc. (Nasdaq: ISIS) is 11% higher in pre-open action following negative new from Pfizer Inc. (NYSE: PFE) on its experimental cholesterol drug. ISIS is developing alternative cholesterol lowering drugs and some are saying it could be a takeover target.

Soleil Securities upgrades Sepracor (SEPR) to Buy, Says Far More Attractive Takeover Target

Soleil Securities upgrades Sepracor (Nasdaq: SEPR) from Hold to Buy with a $67 price target citing improving fundamentals driven by an awakening in the previously sluggish insomnia market, a surge in Xopenex HFA (inhaler) prescriptions, and an apparent delay to Xopenex UDV reimbursement cuts.

Analyst Matt Renna of Neponset Equity Research said, We believe now a far more attractive consolidation target and see the possible addition of SEPR's portfolio to the bag of a larger player as a means to improve sales force efficiency."

Home Depot (HD) CEO Downplays LBO Speculation - Paper

According to reports from the Atlanta-Journal Constitution, Home Depot (NYSE: HD) CEO Bob Nardelli downplayed speculation that the company was the target of a takeover by private equity firms.

Nardelli told the paper, "somebody is probably running the number on us on any given day." He also said the media reports are, "an unfortunate distraction."

Recent reports from the New York Post suggested buyout firms Kohlberg Kravis Roberts and Texas Pacific Group have explored the possibility of a record $100 billion leveraged buyout of the home improvement giant.

Shares of Home Depot are 3.8% higher in mid-day action Friday.

Link to AJC.com article

Citigroup Analyst Comments on Novellus Systems (NVLS) Takeover Chatter

Citigroup analyst, Timothy Arcuri, comments on Novellus Systems (Nasdaq: NVLS): "While a private equity deal here can't be ruled out, necessary hurdle rates for returns remain difficult to achieve based on our work. Rather, we feel an acquisition by a peer such as Tokyo Electron - while risky - is more likely at this point and we now feel the probability of NVLS being acquired in the next 1-2Qs is at least 50%."

Arcuri continued, "While a deal would clearly move the stock higher, absent this factor, the fundamental margin story here has played out and shares are now under some pressure in core businesses such as CVD. We thus maintain Hold, $32 price target."

USG A Takeover Target?

There are a reports that yesterday's 8% move in USG Corp (NYSE: USG) was related to rumors that large holder Warren Buffett would buy the rest of the company. Yesterday, we mentioned the move in USG in our post on the asbestos-related run-up in WR Grace & Co. (NYSE: GRA), but we did not hear any takeover talk at that time. Link

Home Depot (HD) Higher As LBO Talk Gains Steam

Shares of Home Depot Inc. (NYSE: HD) are 4% higher in early action as LBO speculation gains steam. A takeover of the home improvement giant would seem completely far-fetched not so long ago, but with the activity and wealth of private equity buyers, analysts now say a deal could make sense.

Recent reports from the New York Post, suggest private equity firms including KKR have held talks with investment banks about structuring the deal.

UPDATE: Claire's Stores (CLE) Confirms It Hired Banker to Explore Strategic Alternatives

UPDATE: Claire's Stores, Inc. (NYSE: CLE) confirmed that it is exploring strategic alternatives for enhancing shareholder value, including a possible sale of the company. The Company has retained Goldman, Sachs & Co. as its financial advisor to assist in this effort. The Company stated that there can be no assurance that this process will result in any specific transaction.