British Billionaire Lewis Raises Stake Bear Stearns (BSC) to 9.57%

In an amended 13D filing this morning on Bear Stearns (NYSE: BSC), Joseph Lewis disclosed an 9.57% stake (11,053,463 shares) in the investment bank.

This is up from the 8.01% stake (9,253,053 shares) Lewis disclosed in a past filing.

Lewis is a British billionaire and is the 486th richest person in the world according to Forbes' 2006 list.

Shares of Bear Stearns are trading at multi-year lows as the subprime debacle continues to unfold.

Cohen's SAC Capital Discloses 7% Stake in Merger Stock Pharmion (PHRM)

In a 13D filing this morning on Pharmion Corporation (Nasdaq: PHRM), Steve Cohen's SAC Capital disclosed a 7.1% stake (2,675,000 shares) in the company. The firm held 212,357 Pharmion shares at the quarter ended Sept 30, 2007.

Cohen's firm didn't make any direct requests of Pharmion, which is currently in a cash/stock merger agreement with Celgene Corporation (Nasdaq: CELG).

Based on the closing price of Celgene on Monday, the deal is worth $65.44 ($25 cash, $40.44 stock based on 0.837 ratio) per Pharmion share. Pharmion closed at $62.93 on Monday.

Ackman's Pershing Square Boosts Target (TGT) Stake to 9.97%

In an amended 13D filing on Target (NYSE: TGT), William Ackman's Pershing Square disclosed a 9.97% stake (82,797,200 shares) in the company. This is up from the 9.6% stake (81,761,411 shares) the firm held in a past filing.

Much of Ackman's position in held through call options, exercisable through dates ranging from October 2, 2008 to April 6, 2009.

Pershing Square noted that their representatives have met and may in the future meet with Target's management to engage in discussions that may include matters relating to the strategy, business, assets, operations, capital structure and/or financial condition in an effort to enhance shareholder value.

Large Enzon (ENZN) Holder DellaCamera Capital Wants Company To Unlock Value

In a 13D filing on Enzon Pharmaceuticals Inc. (Nasdaq: ENZN), DellaCamera Capital disclosed a 5.2% stake (2,278,339 shares) in the company. The firm disclosed a letter to the company saying there is a troubling value disconnect in the stock. The firm requested the company hire an advisor to analyze various financial and structural options and implement a cohesive financial plan of action that would deliver increased value to the shareholders.

The firm said these options may include the rationalization of the Company's marketed products segment, including the sale of the Abelcet product line, along with the possible monetization of additional Company royalty interests. The firm said Enzon should also consider structural methods to unlock the value of the Company's LNA development platform.

A Copy of the Letter:

Dear Jeff:

We have enjoyed our recent dialogue and correspondence with you. As you are aware, entities advised by DellaCamera Capital Management, LLC (“DCM”) are significant shareholders of Enzon Pharmaceuticals, Inc. (“Enzon” or the “Company”) and currently own in excess of 5% of the Company. DCM’s sizeable investment reflects our steadfast belief in the attractiveness of the Company’s numerous assets. In our opinion, Enzon’s current stock price of $9.75 represents a significant discount to the intrinsic value of the Company and in no way reflects the tremendous embedded optionality associated with Enzon’s R&D pipeline and technology platform. Based upon our recent communications, our sentiments are likely of no surprise to you.

While we are encouraged by your recent efforts to highlight the exciting compounds in development and the extensive intellectual property associated with the Company’s PEGylation platform, it is our opinion that Enzon’s commercial operations alone (its marketed products, royalty streams, and contract manufacturing business) may be worth significantly more than the Company’s current share price. To put it another way, the market seems to be currently ascribing negative value to the Company’s R&D pipeline and technology platform. By our calculations, the recent share price of $9.75 implies a shocking negative value of ($263.5 million) for the Company’s R&D operations, as follows:

(1) Enzon has four products on the market that we estimate will generate approximately $100 million of revenue in 2007. Assigning a reasonable pharmaceutical sales multiple of 3.5x yields a value of $350 million for the marketed products.

(2) Enzon recently sold a 25% interest in its royalty from PEG-Intron for $92.5 million, and may potentially receive an additional one-time milestone payment of $15 million. Assuming this $15 million has a present value of $7.5 million, Enzon effectively received $100 million in value for its 25% interest, implying a $400 million value for the entire PEG-Intron stake, or $300 million for Enzon’s remaining 75% interest. Enzon also receives royalties associated with the sale of Pegasys and Macugen and will derive royalty revenue upon the successful approval and launch of Cimzia and Hematide. We approximate the value of the Pegasys, Macugen, Cimzia, and Hematide royalty streams at $100 million, implying (together with the $300 million of value for Enzon’s PEG-Intron stake) a $400 million total value for Enzon’s royalty segment

(3) We estimate that Enzon will derive $16 million in revenue from its contract manufacturing business in 2007. Applying a 2.5x revenue multiple, which is an approximate 1.0x multiple discount to Lonza Group AG, yields an incremental $40 million of value for the Company’s contract manufacturing business.

This is a troubling value disconnect, especially when one considers the array of compounds that Enzon has in clinical trials and the Company’s extensive PEGylation expertise, in addition to Enzon’s locked nucleic acid (LNA) efforts. Indeed, there are publicly-traded biotechnology companies with multi-hundred-million dollar market values that do not possess as broad a pipeline as Enzon. While drug development is inherently unpredictable, in today’s environment there are certain overarching factors that heighten the value that may be ascribed to development-stage compounds. Consider the well-publicized dearth of product that is plaguing many pharmaceutical and biotech companies; one need only note the significant control premium afforded companies such as Medimmune, Pharmion, and MGI Pharma to understand the desire of pharmaceutical companies to replenish their existing pipelines. Given this current favorable environment, Enzon can no longer allow its pipeline and R&D efforts to be afforded negative value by the marketplace.

It is our belief that the corporate structure and operational complexity of Enzon have made it difficult for the investment community to accurately assess the inherent value of the Company. Enzon in its current form is an amalgam of two distinct businesses: (1) a commercial business comprised of marketed products, royalties, and contract manufacturing; and (2) an R&D organization and technology platform. The profitability of the commercial operations is being completely obscured by the expenses associated with advancing the Company’s clinical and pre-clinical programs. As such, the Company does not appeal to any distinct investor constituency. Furthermore, we believe that the pursuit of activities across multiple business segments has led to substantial operational inefficiencies, resulting in expenses far in excess of acceptable levels. For example, Enzon has only four marketed products yet has to shoulder the expenses associated with two completely distinct sales forces, with one sales force devoted entirely to the marketing of one single product, Abelcet.

It is clear to us that there may be many ways for Enzon to narrow the significant discount to intrinsic value at which the Company is currently trading. Given the array of alternatives available, we believe that the Board of Directors (the “Board”) must engage the services of a reputable, nationally-recognized financial advisor to provide impartial assistance in analyzing various financial and structural options and implement a cohesive financial plan of action that would deliver increased value to the shareholders. These options may include the rationalization of the Company’s marketed products segment, including the sale of the Abelcet product line, along with the possible monetization of additional Company royalty interests. Furthermore, Enzon should consider structural methods to unlock the value of the Company’s LNA development platform. Indeed, a number of publicly-traded biotechnology companies have attempted to creatively highlight the value of their own RNA-interference efforts, an area which has generated great enthusiasm from the scientific and investment community.

Though we reserve all of our rights to protect the value of our investment, it is our preference to work constructively with management and the Board to ensure that maximum value is delivered to the shareholders of Enzon. As such, we wish to continue our discussions with you and hope to expand upon this dialogue to include the Board. We look forward to speaking with you in the very near future.

Richard P. Mansouri

Portfolio Manager

Peltz Builds Up 10% Stake in Cheesecake Factory (CAKE)

According to reports from Bloomberg, Nelson Peltz' Trian fund has built up a 10% stake in Cheesecake Factory (Nasdaq: CAKE), citing a source. The source also indicated Peltz may increase his position.

Earlier today, Nelson Peltz' Trian Star Trust was granted early termination notice from the FTC, required under the Hart-Scott-Rodino antitrust law, on Cheesecake Factory.

The FTC did not disclose the nature of the transaction, but approvals are given on acquisition of stocks or assets greater than $50 million.

Peltz did not show a stake in Cheesecake Factory at the quarter ended Sept 30, 2007.

Shares of Cheesecake Factory are up 8% today.

Jana Partners Boosts Copart (CPRT) Stake Above 5%, Files 13D

In a 13D filing on Copart Inc. (Nasdaq: CPRT), Jana Partners disclosed a 5% stake (4,490,540 share) in the company. Jana held 4,469,733 shares at the quarter ended Sept 30, 2007. A 13D indicates a potential 'activist investment'.

In a pretty standard disclosure, the firm did not make any direct requests on the company, but said they will monitor their investment and may enter discussions with management, the Board of Directors or others.

Shamrock Wants Panera (PNRA) Staggered Board Declassified, Buybacks Among Other Things

UPDATE: In a 13D filing on Panera Bread Co. (Nasdaq: PNRA), Shamrock Activist Value Fund, L.L.C. disclosed a 5.46% stake (1,686,400 shares) in the company.

Shamrock said it has had, and anticipate having further, discussions with the Company's senior management regarding its ideas to enhance shareholder value. These ideas have focused on improvements in the Company's operations, corporate governance, executive compensation arrangements and utilization of its capital resources.

Shamrock believes that the governance deficiencies at the Company, among other things, impede accountability to the detriment of shareholder value. Shamrock requested that the Company declassify its staggered Board, separate the Chairman and CEO roles, seek to convert the outstanding shares of the multiple vote Class B common stock into Class A Common Shares so that all shares of common stock have the same voting rights, and expand the Board of Directors to add new members, including individuals with relevant operating experience.

Shamrock have also proposed that the Company improve the disclosure of its compensation plan to provide increased transparency with respect to performance benchmarks that would allow shareholders to better assess whether the Company's current compensation plan appropriately aligns pay with performance. Shamrock said a properly designed performance based incentive compensation significantly contributes to the creation of long-term shareholder value.

Shamrock have also urged the Company to use its strong balance sheet to fund a prompt and significant repurchase of the Company's common stock. Shamrock believes the recently announced $75 million Company share repurchase is a positive step by the Company to proactively utilize its capital resources. In light of current market prices for the Company’s Class A Common Shares, Shamrock believe the Company should actively purchase its Class A Common Shares pursuant to this newly adopted repurchase program.

Ramius Capital Accumulates 7.4% Stake in Federal Signal (FSS)

In a 13D filing this morning on Federal Signal Corp. (NYSE: FSS), Ramius Capital disclosed a 7.4% stake (3,549,068 shares) in the company.

In a pretty standard disclosure, the firm did not make any direct requests on the company, but said they will monitor their investment and may enter discussions with management, the Board of Directors or others.

Federal Signal makes products and integrated solutions for municipal, governmental, industrial and airport customers.

On Wednesday (12/12), Federal Signal CEO and President Robert D. Welding resigned from the company.

Federal Signal has significantly underperformed the market and is down 29% year-to-date.

Highland Capital Wants PDL BioPharma (PDLI) To Hire A New Advisor For Sale Process

In an amended 13D filing today on PDL BioPharma (Nasdaq: PDLI) today, 7% holder Highland Capital Management, L.P. disclosed a letter to the company saying they are closely monitoring the sale process and recommended the Board of Directors engage a new financial advisor with substantial experience and competence to maximize the value the company's pharmaceutical royalty stream asset. The firm said the company's current advisor, Merrill Lynch, is not qualified.

Highland Capital said Merrill Lynch appears incapable or unwilling to market the royalty stream to all appropriate buyers, which they believe will impair the value of the asset. Highland Capital named a number of firms, including themselves, that desire to be included in the auction.

Highland Capital said, "The recent sell down by your most vocal shareholder should not invite the Board of Directors to ignore its fiduciary duty to the company's owners." Highland is clearly pointing to Daniel Loeb's Third Point LLC, which recently sold its entire stake in the PDL.

Shares of PDL are up 2% top $18.39 today.

Copy of the Letter:

Ladies and Gentlemen:

We acknowledge the progress the Board of Directors has made towards achieving the objectives outlined in the October 1st press release and continue to believe that an expeditious sale of PDL Biopharma, Inc. (“PDL”) as a whole or the monetization of its key assets will generate significant value for shareholders. As you are obviously aware, the recent sell-off in the stock has further widened the gap between the company’s public-market valuation and intrinsic value, making the Board of Director’s task even more relevant. The recent sell down by your most vocal shareholder should not invite the Board of Directors to ignore its fiduciary duty to the company’s owners. Rest assured that Highland is closely monitoring the process with a view towards protecting our investor’s best interests.

In our previous communication we encouraged the Board of Directors to retain additional expertise in evaluating its most valuable asset, the royalty stream. As you know, PDL’s royalty stream is a complex financial asset most comparable to a bond and in our opinion should be marketed as such if maximum value is to be achieved. Thus, we recommend that the Board of Directors engage an advisor with substantial experience and demonstrable competence with these esoteric assets. We do not believe the advisor selected by the Board of Directors is so qualified. When pressed on a recent conference call, Merrill Lynch could not name a single successful pharmaceutical royalty securitization transaction it had consummated. Their status as a leader in the mortgage securitization marketplace is irrelevant given the unique cash flow characteristics and buyer pool of pharmaceutical royalty streams.

While the current advisor’s lack of experience with pharmaceutical royalties is reason enough to seek additional counsel, recent developments lead us to believe that the Board of Directors should seek additional assistance immediately. Pointedly, the current advisor appears incapable or unwilling to market the royalty stream to all appropriate buyers, which we believe will impair the value of the asset. In fact, we understand that many well-known leading buyers of pharmaceutical royalty streams have been denied diligence materials to assist them with valuing the asset. Based on our experience, a substantial universe of savvy, well-capitalized investors would include Farallon Capital Management, HBK Investments, QVT Financial, Marathon Asset Management, Perry Capital, McDonnell Investment Management, Taconic Capital Advisors, and Apollo Investment Corp; these parties and others should be given the full opportunity to enter into a confidentiality agreement in order to evaluate the company’s assets. Furthermore, Highland Capital Management has been excluded from this process, which we find particularly concerning given our status as a significant equity owner and participant in the pharmaceutical royalty securitization market. Highland Capital Management desires to be included in this auction, is willing to sign a confidentiality agreement, and will dedicate substantial resources to evaluate these assets in a most expeditious manner. We believe the prosecution of the asset sales thus far to be a breach of fiduciary responsibility by both Merrill Lynch and the Board of Directors.

Finally, we believe the current advisor may be rushing to achieve a transaction that we would view as suboptimal. It is our understanding that the final bid date for the royalty auction has been set for December 19th. Additionally, based on our market reconnaissance, we believe that the field of bidders has been effectively limited to one party, leading us to believe that the process is not competitive and will result in a suboptimal outcome if allowed to proceed. We believe the auction should be conducted in early 2008, with a pre-arranged financing package available for any potential buyer — a successful royalty stream auction tool that a more experienced advisor routinely provides.

With the proper guidance, we believe the Board of Directors can deliver an optimal outcome to shareholders. We reiterate our demand that the Board of Directors take appropriate actions to honor its fiduciary obligations to PDL’s shareholders.

Sincerely,

Jim Dondero

President and CEO

Highland Capital Management

Brinks (BCO) Holder MMI Wants To Assist In Strategic Review

In an amended 13D filing this morning on Brinks Co. (NYSE: BCO), 8.4% shareholder MMI Investments, L.P disclosed a letter to the company's consulting firm, Monitor Group, requesting to assist in the evaluation of the strategic options available to the company.

From the letter, "We read with interest the announcement of Monitor Group's retention by The Brink's Company "to assist in the ongoing evaluation of the various strategic options available to the company." During our more than four years as one of the largest owners of Brink's we have spent extensive time and effort scrutinizing Brink's chronic undervaluation and attempting to unlock the company’s significant intrinsic value through the encouragement of strategic alternatives. We believe Monitor Group would benefit from our experience and insights on these issues and would appreciate the opportunity to communicate with your team directly."

Chapman Capital Cuts Stake in Building Materials (BLG)

In an amended 13D filing after the close on Building Materials Holding (NYSE: BLG), Chapman Capital disclosed they lowered their stake in the company to 7.5% (2,212,339 shares). This is down from the 9.0% stake (2,656,339 shares), the firm disclosed in a past filing.

The firm said they sold stock in November and December of 2007 in order to satisfy the Funds' tax planning.

Chapman Capital, which had been pushing for a sale of Building Materials, is underwater in the position, mainly due to the continued deterioration of the housing market. Shares of Building Materials are currently selling at about $6.50 per share --- Chapman's average cost is in the mid-$14 range.

Clinton Group Accumulates 7.2% Stake in Sharper Image (SHRP)

In a 13D filing on Sharper Image (Nasdaq: SHRP), Clinton Group and related funds disclosed a 7.2% stake (1,092,270 shares) in the company. The firm held 157K Sharper Image shares at the quarter ended September 30, 2007.

In a pretty standard disclosure, the firm did not make any direct requests on the company, but said they will monitor their investment and may enter discussions with management, the Board of Directors or others.

Sharper Image has been a struggling retailer for some time. The stock is down 64% YTD and 82% over the last 5 years.

About 31% of the float is short.

Nelson Peltz' Trian Raises Stake in Cadbury Schweppes (CSG)

Shares of Cadbury Schweppes (NYSE: CSG) are slightly higher today after the company confirmed that Nelson Peltz' Trian raised their stake in the company from 3.47% to approximately 4.5%.

Cadbury Schweppes said it is their understanding that the instrument through which the increased interest is held is not reportable and it has not received formal notification of the increase in writing.

Because Peltz owns less than 5% of the shares, a 13D is not required to be filed with US regulators related to the ADR.

Following Peltz' involvement in the stock back in March, Cadbury Schweppes announced plans to separate its confectionery and Americas Beverages businesses. After trying to unsuccessfully sell the Americas Beverages unit, due to the credit market freeze-up, Cadbury Schweppes is now spinning-off the business.

Philips (PHG) Shares Up Today After Two Strong Activists Join Forces

JANA Partners and the D.E. Shaw both own Koninklijke Philips Electronics (NYSE: PHG). Over the weekend, these activist investors say they intend to act together to communicate their views, regarding Philips' operating performance and capital structure. The investors hold interests representing approximately 1.6% of the outstanding common shares. No 13D has been filed because the investors do not own 5%.

They filed this disclosure over the weekend, because they did not want to be in violation of Dutch law.

Philips is trading up over 4% today on the news.

Philips Electronics makes a wide range of products from shavers and televisions to medical scanners and light-emitting diodes, in September launched its "Vision 2010" strategic plan.

Indian Hotels Raises Stake in Orient-Express (OEH), Seeks Talks; Faber Said Things Heating Up

On CNBC, David Faber highlighted a Friday amended 13D on Orient-Express Hotels Ltd. (NYSE: OEH) showing that The Indian Hotels Company Limited raised its stake in the company to 11.5% (up from 10%) and said it continues to explore opportunities for a possible association between Indian Hotels and the Company. Indian Hotels stated that its proposal will not result in a merger nor affect the independent status of the Company. Indian Hotels said the company has been unresponsive.

Orient-Express, in resisting past overtures from The Indian Hotels and another group, the Dubai Investment Group, has repeatedly stated that its standalone business strategy provided the best long-term value for shareholders.

CNBC's Faber said some investors of Orient-Express have been frustrated that the company has not actively pursued a sale. Faber said things may be heating up.

Interestingly, Steve Cohen's SAC Capital recently disclosed a 5.6% in the company. The stake is "passive", meaning Cohen doesn't have plans to influence the board or management --- of course this can change. Cohen, while not considered an activist investors, has been vocal with a few of his other investments.

Orient-Express owns luxury hotels around the world. Many of the company's properties are considered "prize" hotels.

Copy of Letter:

Dear Mr. Paul White,

We are sorry to have received no reply to the proposal outlined at our meeting on 12th October and subsequently confirmed in our letter of 19th October. The six principal points of this proposal are summarized in the memorandum attached to this letter.

To progress this matter, may we schedule a meeting with yourself and your Board to permit Mr. Tata and myself to discuss this proposal with you, and refine any aspects which are not clear. As you will remember from our meeting, and indeed from our 19th October letter, we agreed to make no further stock purchases until we had a reply as to the suggested meeting, which you indicated would be following your early December Board meeting. As I am sure you will agree, this matter should not be left outstanding indefinitely, so now we look forward to your response, as to when this meeting can be arranged.

With kind regards,

Yours sincerely,

/s/ R.K. Krishna Kumar

Proposal

1. OEH can bring under its fold IHCL non-Indian or non-Indian-Ocean hotels on terms to be agreed.

2. OEH and IHCL will jointly redevelop the St. James Court site in London to convert it into a super premium luxury hotel and serviced apartments.

3. A joint committee (2 members each) will review and implement potential synergies – materials purchasing; consumables purchasing; cross-marketing; air charter, including our subsidiary Taj Air; ultra-luxury vacation, honeymoon and other packages; IT, where our IT affiliate is home to the world’s fourth largest supercomputer, and shared best practices.

4. A Director of OEH will join the board of IHCL, Director of IHCL will join the Board of OEH.

5. IHCL will purchase further shares in OEH and would welcome OEH as a shareholder in IHCL, both at minority levels to be agreed.

6. OEH will continue as a stand alone public company, with its Board and benefits unchanged.

Jove Partners Raises Stake in Lifetime Brands (LCUT) TO 7.8%

In an amended 13D filing on Lifetime Brands, Inc. (Nasdaq: LCUT), Jove Partners disclosed a 7.8% stake (975,000 shares) in the company. This is up from the 6.3% stake the firm showed in a past filing.

The firm also disclosed a letter to the company saying they have been encouraged by its renewed effort to increase cash generation and optimize capital allocation. The firm is also pleased by the expanded buyback and election of David Dangoor to the board of directors.

From the Letter: "we are encouraged by your company's renewed effort to increase cash generation and optimize capital allocation. We believe that the proposed inventory reduction plan will incentivize employees to limit the resources tied up in product and provide Lifetime Brands with significant improvements in working capital. We anticipate that the announced closing of marginal and unprofitable retail operations will free-up capital and allow your management team to enhance its focus on the core business. In addition, we expect that the consolidation of your company's West Coast warehouse facilities will improve operations and, combined with the sale of your former headquarters, strengthen the balance sheet. We also fully support the plan to expand Lifetime Brands' share repurchases."

British Billionaire Lewis Raises Stake in Bear Stearns to 8% (BSC)

In an amended 13D filing this morning on Bear Stearns (NYSE: BSC), Joseph Lewis disclosed an 8.01% stake (9,253,053 shares) in the investment bank. This is up from the 6.97% stake (8,096,942 shares) Lewis disclosed in a past filing.

Lewis is a British billionaire and is the 486th richest person in the world according to Forbes' 2006 list.

Pennant Capital Said Axcan Pharma (AXCA) Buyout Price Too Low

In a 13D filing on Axcan Pharma Inc. (Nasdaq: AXCA), 9.95% holder Pennant Capital Management said they are disappointment with the $23.35 per share buyout price by TPG Capital.

The firm said, "While we support selling the Company, we believe the valuation indicated is inadequate considering the strong cash flows of the business coupled with significant net cash on the balance sheet."

Pennant Capital requested the company disclose full details of the process undertaken to realize the highest value of the company in the proxy materials.

Pennant Capital believes the Company is worth at least $25/share.

A Copy of the Letter:

Dear Chairman and Members of the Board,

We are writing to express our disappointment in the valuation that was obtained for the Company in the recently announced proposed transaction with TPG Capital. While we support selling the Company, we believe the valuation indicated is inadequate considering the strong cash flows of the business coupled with significant net cash on the balance sheet. In order to support any proposed transaction and to fully understand that management and the Board have appropriately explored all alternatives to maximize shareholder value, the proxy materials that will be provided to shareholders must disclose full details of the process undertaken to realize the highest value for the Company, the ongoing role, compensation and ownership of management and directors in the new entity and the fairness opinion.

Due to our concerns on the valuation of the transaction, the quality of the auction performed and the potential for conflicts to exist with management and the directors, shareholders require that the Board include full details of the process that was undertaken. Details of the process should include when the process started, all strategic or other investors contacted, all bids received including whether from strategic or financial buyers, any modification of bids and any periods of exclusive negotiation.

We believe that the absolute valuation of the proposed transaction is low relative to the prospects of the business. The proposed takeout price values the Company at $1.3 billion. The enterprise value is only $1 billion net of the $310 million in net cash on the balance sheet (or>$5.50 per share). Last year the Company generated over $100 million in free cash flow (FCF) and $135 million in EBITDA (excluding the one-time acquired in process R&D charge of $10 million). This implies a 10% FCF/EV yield or a multiple of 7.4x EV/EBITDA which we believe is significantly undervaluing the future cash flows of the Company. We believe the Company is worth at least $25/share using a relatively conservative 8x EBITDA multiple which still results in a high single digit FCF yield.

While the recent press release states that the acquisition was completed at a 28% premium over the average trading price of the common shares on November 28th , we believe that the more relevant time period to look at is the last 90 days over which time period most of the negotiations likely took place. The stock price over that time period averaged $19.68 with a 52-week high closing at $21.29 during that period. The premium over the average of that time period was only 19% which we consider inadequate considering the strong performance of the business (most recently demonstrated in the last quarter’s results) and the significant cash generating capabilities of the business on a go forward basis. Ironically, if the deal had been announced the day after the release of the Company’s most recent strong financial results, the premium would certainly have been smaller or perhaps non existent.

The timing of the deal announcement also causes us concern. The stock had been trading at 52 week highs, north of $20/share in October based on very strong results including beating revenue and earnings estimates for the last 8 quarters in a row, while being valued at a discount to peers and having>$5/share in net cash. A report was released recommending shorting the stock that caused a 14% decline in the share price from October 31st to the average closing the week prior to the announcement of the deal. After reviewing the report with the analyst in detail, it became clear that there was no new factual information, and in our opinion, misinterpretation of the impending risks the Company faced. This was coupled with a valuation analysis that was not reflective of the strong balance sheet, cash flows and earnings power of the Company under any scenario.

The deal was then announced concurrently with very strong revenue and earnings report that, coupled with guidance, likely would have driven a recovery in the stock price. So we are very concerned that the timing of the deal was announced so that the premium looked much more substantial than it would have if the stock had merely reacted appropriately to the latest facts about the operating and balance sheet strength of the Company.

We believe that the Company has done an outstanding job in improving the core business as continues to be evidenced by the strong financial results. We are concerned that the strength of the business is being undervalued by TPG Capital. We strongly urge the Board, as a part of their fiduciary responsibility, to fully disclose the details of the process and evaluation to allow us to assess the fairness of this transaction.

Sincerely,

Alan P. Fournier

Managing Member

Pennant Capital Management, LLC

Shamrock Activist Value Fund Raises Stake in Websense (WBSN) 6.1%

In an amended 13D filing on Websense Inc. (Nasdaq: WBSN), Shamrock Activist Value Fund disclosed a 6.09% stake (2,764,465 shares) in the company. This is up from the 5.03% stake the firm showed in the original 13D (October).

The firm did not amend Item 4 "Purpose of Transaction' of the filing. In the original 13D, the disclosure was pretty standard. Shamrock did not make any direct requests on the company, but said they will monitor the investment and may buy or sell stock accordingly. The firm has no plans which would related to paragraphs (a) through (j) of this Item 4 to the form Schedule 13D.

Large NetManage (NETM) Holder Riley Investment Discusses Concerns About CEO and Seeks Sale of the Co

In an amended 13D filing on NetManage, Inc. (Nasdaq: NETM), 7.5% holder Riley Investment Management disclosed a letter to the company detailing its concerns about the motivation, decision-making and disclosure of CEO Zvi Alon and the Board of Directors. The firm also urged the board to retain a banker and to auction the company as expeditiously as possible.

From the letter, "Riley Investment Management holds a 7.5 percent stake in NetManage. While this is a significant percentage, we must state at the outset that this investment is in no way a reflection of our confidence in the decision-making abilities of Chairman, President and Chief Executive Officer Zvi Alon or the Board of Directors. In fact, we have serious concerns about Mr. Alon’s and the Board's motivation and disclosure, each of which will be addressed in detail below. We believe that shareholders will be best served, and value most appropriately realized, through an immediate auction of the company in which we believe NetManage could garner bids of between $5 to $6 per share, or a 25 percent to 60 percent premium to current trading prices."

SuttonBrook Capital Accumulates 5.8% Stake in M&A Casualty United Rentals (URI)

In a 13D filing on United Rentals, Inc. (NYSE: URI), SuttonBrook Capital disclosed a 5.83% stake (5 million shares) in the company. This is up from the 350,000 share stake the firm held at the quarter ended September 30, 2007.

In a pretty standard disclosure, the firm did not make any direct requests on the company, but said they will monitor their investment and may enter discussions with management, the Board of Directors or others.

Recently, Cerberus said they are not prepared to proceed with the $34.50 per share acquisition of URI, which sent the stock tumbling lower. United Rentals currently trades at $22.90.

Farallon Capital Discloses 5.3% Stake in California Pizza Kitchen (CPKI)

In a 13D filing after the close on California Pizza Kitchen, Inc. (Nasdaq: CPKI), Farallon Capital and related parties disclosed a 5.3% stake (1,558,821 shares) in the company.

In a pretty standard disclosure, the firm did not make any direct requests on the company, but said they will monitor their investment and may enter discussions with management, the Board of Directors or others.

Loeb's Third Point LLC Lowers Stake in Atmel (ATML) Below 5%

In an amended 13D filing after the close Friday on Atmel (Nasdaq: ATML), Daniel Loeb's Third Point LLC disclosed they lowered their stake in the company to 4.99% (22.4 million shares).

Loeb's firm held 35 million shares of Atmel at the quarter ended September 30, 2007.

Loeb's firm sold large blocks of Atmel stock from 10/11 thru 11/30 at prices from $5.80-$4.39.

Because Loeb's firm is below the 5% threshold, he will not be required to file updated 13Ds on the position.

Atmel has not been a winning trade for Loeb. The original 13D, filed in July, showed Loeb paid an average of about $5.45 per share for the stock. It is currently at $4.42.