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It is early Monday morning. Always interesting to turn on financial news on Monday mornings as that seems to be when mergers are typically announced. The one that caught my eye (Western Refining to buy Giant Industries for $1.2 billion: WSJ) was Western making a bid for Giant Indsutries (must be a big company!). Looking at the graph, you could have bought GI at about $20 just two years ago, now it'll be around $80.

I found two things intersting about this proposed merger.

1. It must cast a bit of a halo on my FTO.
2. The price being offered ($1.2b) is only a 15% premium over Friday's close.

I wonder, how do they come up with the 15%? Do they talk with key owners of the stock and ask hypothetically what would they accept? Do they look at past mergers in the industry and decide a fair premium? I gotta say that 15% seems pretty paltry. At such a price, I wonder if that opens the door for a counterbid?

Well shiver me timbers! As I was discussing the lack of premium in the Giant merger, Corel announced that they were buying IVII for $13 a a share, about a 30% premium (Corel to buy InterVideo for $196M, or $13/shr, cash). I sold my IVII today at $12.62 as it is now an arbitrage play. At then end, I made 16% on IVII, not bad. Had one bought them last week when under $9.10 in my rubberband blog, you'd have a very satisfactory 44% gain. In all it validates the MFI approach. This is the 2nd of my 30 stocks to be bought or taken private in six months on the gig.

Not sure what I'll do with the money. My short list (right now) includes: note closing Friday prices shown.

BVF (16.95)
VPHM (10.98)
BDY (13.77) - three pharmaceuticals I have been watching.

UNTD (10.80) - not the airline but rather a nimble ISP which I think will benefit from AOL customers leaving with their new strategy.
BBSI (20.80) - a company that outsources for businesses.
JTX (34.84) - tax preparation firm.
ELOS (21.73) - cosmetic surgery company.

I want to try and be patient (very difficult for me) and pick one of these up on a downtick. (BVF is already on a downtick, just not sure I can overcome the stench).

The IVII sale along with a nice green day really bolstered my MFI portfolio. Up a rocking 1.8%. Funny, my best stock (besides IVII) was DLX, up almost 4%. Since hitting its low on July 24th, DLX is up 31%... with a dividend kicked in for good measure. That is why I want to be patient with my next MFI buy. (pity I didn't buy BDY as it shot up over 5% today!).

The whole IVII thing reminds me of a passage from his book,(ahem)

"In short, over time the interaction of all these things - smart investors searching for bargain opportunities, companies buying back their own shares and the takeover or possibility of a takeover of an entire company - work together to move share prices towards fair value. Sometimes the process works quickly, and sometimes it can take several years."

Finally, trying a new format to mark sold stocks on my list. Sooner or later I'll need to find a way to consolidate sold stocks... but I have so few in the black I like to include them!

Stock	Cost	Current	Gain
NCOG	$19.39	$27.05	39.5%
UST	$39.36	$52.65	36.6%
FTO	$28.76	$36.25	26.1%
MGLN	$38.34	$48.35	26.1%
PCU	$78.13	$90.76	22.3%
IVII	$10.93	$12.62	15.5%
TRLG	$17.02	$19.65	15.5%
MTEX	$13.11	$13.82	6.0%
ANF	$61.13	$62.18	2.3%
PNCL	$6.68	$6.82	2.1%
NSS	$45.89	$46.60	1.6%
PGI	$7.71	$7.75	0.5%
CHKE	$37.55	$36.89	-0.2%
PTEN	$27.74	$27.12	-1.9%
MSTR	$94.36	$91.37	-3.2%
RAIL	$58.18	$56.02	-3.7%
TGIS	$10.34	$9.75	-4.6%
KG	$17.31	$16.40	-5.3%
FDG	$34.03	$30.73	-7.1%
ISNS	$13.17	$11.82	-10.3%
ELX	$17.85	$15.82	-11.4%
PACR	$32.53	$27.20	-15.5%
EZEN	$2.84	$2.30	-18.9%
TBL	$34.50	$27.46	-20.4%
ORCT	$11.83	$9.15	-22.7%
DLX	$26.36	$17.71	-30.3%
PONR	$32.97	$22.50	-31.8%
PTSC	$1.31	$0.88	-32.8%
OVTI	$27.79	$16.69	-39.9%
HW	$37.42	$22.06	-41.0%
Total Gain/Loss			-$13,426
Benchmark Gain/Loss			$3,128
Annual IRR			-12.3%
% Gain/Loss			-4.7%