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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (40261)	11/24/2010 10:58:03 AM
From: E_K_S	1 Recommendation Respond to of 78715

Hi Grommit - There is a bit of option activity yesterday and today for SVU trading at the April 2011 expiration. Over 1000 contracts yesterday for the April 11 calls and today a 1000 contracts for the April $9.00 Puts. The activity is actually small especially if there was some sort of pending bad news so I suspect sellers are frustrated owners finding better value in other stocks. With SVU trading at current levels, it becomes doable for a private equity buyer to pick the company up using cheap financing. I doubt this would occur but w/ QE2 money sloshing around, there is tons of money sitting on the sidelines. What is interesting is that David Boehnen was pushed out of the company last week. ( finance.yahoo.com ). Boehnen has been responsible for legal, business development, real estate and store development, as well as government affairs. He has served as an important advisor to the CEO and the board of directors on a number of significant issues and opportunities that have influenced the company’s growth. Todd Sheldon, group vice president, legal, will be promoted to senior vice president and general counsel (Boehen's previous position), reporting to Andy Herring, executive vice president of real estate, market development and legal. I can only guess that SVU may be looking at doing another "major" real estate downsizing. This could be in conjunction with a private equity deal and/or just what is required to reduce their long term debt. In either case, there is still a lot of intrinsic value in SVU but I fear shareholders may only see a part of this if a large private equity firm snatches up the company. There is chatter on the message boards that a buy out price could be in the $12.00/share area. With todays purchase, my average cost is around this level ($12.45/share). I value the stock at $17.00-$20.00 a share but only if they reduce their debt by selling more of their real estate holdings. I will wait and see what Todd Sheldon proposes to his boss and the SVU board. EKS