HFS - Catalyst Equity Research Report Week Ending May 1 2009

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CATALYST EQUITY RESEARCH REPORT ™ Weekly Research Highlighting Activist Investments Subscribe to receive this FREE Report emailed weekly. www.hedgerelations.com/research.html HEDGE FUND SOLUTIONS HIGHLIGHTING ACTIVIST INVESTMENTS CATALYST EQUITY RESEARCH REPORT ™ Week Ending May 1, 2009 SYMBOL ADF AMLN BBEP BBEP CHE CHG CLHI.PK COHM.PK CPY FACT GEYH.OB GSIG IPAS KFS MCGC PIF PRSC PWER TDS TDS TLGD TMENE.OB TXCC ULU WOLF COMPANY ACM Managed Dollar Income Fund Amylin Pharmaceuticals BreitBurn
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    CATALYST EQUITY RESEARCH REPORT ™ Weekly Research Highlighting Activist Investments   Subscribe to receive this FREE Report emailed weekly.www.hedgerelations.com/research.html     Hedge Fund Solutions, LLC © 2003 – 2009Page 2 of 14 HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT™ HIGHLIGHTING ACTIVIST INVESTMENTS   Week Ending May 1, 2009 SYMBOL COMPANY INVESTOR ADF ACM Managed Dollar Income Fund Bulldog Investors AMLN Amylin Pharmaceuticals Carl Icahn BBEP BreitBurn Energy Partners Baupost Group BBEP BreitBurn Energy Partners Quicksilver Resources CHE Chemed Corp MMI Investors CHG CH Energy Group GAMCO Investors CLHI.PK CLST Holdings Red Oak Partners COHM.PK Coachmen Industries GAMCO Investors CPY CPI Corp Ramius Capital FACT Facet Biotech Corporation Baupost Group GEYH.OB Global Employment Holdings Victory Park Capital GSIG GSI Group Stephen Bershad IPAS iPass Inc. Foxhill Opportunity KFS Kingsway Financial Joseph Stilwell MCGC MCG Capital Springbok Capital Management PIF Insured Municipal Income Fund Bulldog Investors PRSC Providence Service Corp 73114 Investments PWER Power-One Inc Bel Fuse Inc. TDS Telephone & Data Systems GAMCO Investors TDS Telephone & Data Systems Southeastern Asset Management TLGD Tollgrade Communications inc. Ramius Capital TMENE.OB Thermoenergy Corp. Quercus Trust TXCC Transwitch Corp Brener International Group ULU Uluru Inc. Brencourt Advisors WOLF Great Wolf Resorts Hovde Capital Advisors The Official Activist Investing Blog™ The Activist Blog & Tacklers Insights Provided By ContributingExperts From Around The Globehttp://activistinvesting.blogspot.com/   HEDGE FUND SOLUTIONS is a Philadelphia-based strategy consulting, public relations and investorcommunications firm focused on shareholder activism. We have an unparalleled depth of knowledge on the subjectmatter and are the trusted advisor to numerous CEOs, board members and institutional investors worldwide.      Hedge Fund Solutions, LLC © 2003 – 2009Page 3 of 14 HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT™ ACM Managed Dollar Income Fund (ADF)  Activist Investor: Bulldog Investors   Investor Info Catalyst Info Shares 973,112% Outstanding 5.26%Cost Basis Not Avail Company Info Share Price 5.53Revenue 13MMarket Cap 102MEnterprise Value 108MNet Cash -6MEBITDA N/A52 wk. range 3.30 – 7.59EV/EBITDA N/A Catalyst:  On May 1 Bulldog disclosed they had sent a letter to the Board of ADF – a Closed-end Fund, earlier this year(Feb 6, 2009) urging them to consider increasing the size of their annual tender offer to at least 20% of theoutstanding shares. (In previous years ADF has offered to repurchase 5% of the company’s shares outstandingat a price equal to the net asset value per share.) In addition, Bulldog suggested that if this year’s tender offerdraws a much larger response from shareholders interested in tendering their shares, the board should considertaking further steps to address the discount including additional tender offers and open-ending or liquidating theFund. Comment:    According to Bulldog, ADF’s threshold for conducting a tender offer is a 3% discount to Net Asset Value(NAV). As of May 1, 2009 ADF was trading at a 14.53% discount to NAV.On May 1 ADF announced they would limit their tender offer to 5% of the Fund’s outstanding shares.   Amylin Pharmaceuticals (AMLN)  Activist Investor: Carl Icahn   Investor Info Catalyst Info Shares 12,971,328% Outstanding 9.43%Cost Basis 24.39 Company Info Share Price 11.01Revenue 837MMarket Cap 1.5BEnterprise Value 1.5BNet Cash 0EBITDA -188M52 wk. range 5.50 – 35.00EV/EBITDA Negative Catalyst:  On April 30 AMLN announced they will allow Icahn and Eastbourne Capital to speak with each other in orderto discuss ways to achieve a settlement agreement to the proxy fight. Comment:   We previously covered AMN in numerous Catalyst Research Reports, highlighting Icahn’s and Eastbourne’sattempt to each replace five of twelve board members up for election this year. Brief Summary: Icahn owns 9.5% and Eastbourne owns 12.5%. The Company’s lenders have poison put options built into certain debt agreements, making a board change in control very costly – if not prohibitive. Inaddition, without this approval from the Company, AMLN’s 15% poison pill bars Icahn and Eastbourne fromdiscussing a combined slate of minority director nominees.Go to The Official Activist Blog™ to find out how to watch a live video and on-demand webcast of the 2-daytrial (begins Monday May 4) determining the validity of the poison put takeover defense.http://activistinvesting.blogspot.com/     BreitBurn Energy Partners (BBEP)  Activist Investor: Baupost Group Investor Info Catalyst Info Shares 8,495,939% Outstanding 16.10%Cost Basis 7.40 Company Info Share Price 6.94Revenue 470MMarket Cap 366MEnterprise Value 1.1BNet Cash -744MEBITDA 612M52 wk. range 5.25 – 23.73EV/EBITDA 1.8 Catalyst:  On April 30 Baupost changed their filing status with the SEC from “passive” investor to “active” investor andannounced that as a result of the company’s recent announcement to temporarily suspend distributions tounitholders. Comment:   On April 17 BBEP announced (i) its borrowing base under its credit facility has been redetermined to $760M (from 900M), which exceeds current borrowing of $717M; and (ii) it was temporarily suspending distributionsto remain in compliance with its credit facility and to redirect cash to pay down debt.See additional comments re: investor Quicksilver Resources below.    Hedge Fund Solutions, LLC © 2003 – 2009Page 4 of 14 HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT™ BreitBurn Energy Partners (BBEP)  Activist Investor: Quicksilver Resources   Investor Info Catalyst Info Shares 21,347,972% Outstanding 40.45%Cost Basis Not Avail Company Info Share Price 6.94Revenue 470MMarket Cap 366MEnterprise Value 1.1BNet Cash -744MEBITDA 612M52 wk. range 5.25 – 23.73EV/EBITDA 1.8 Catalyst:  On April 30 Quicksilver sent a letter to the Board of BBEP expressing their deep disappointment with therecent announcement to suspend quarterly distributions to its unitholders and requested that immediate actionbe taken to pay down the debt so that quarterly distributions can be restored.In the letter Quicksilver commented that BBEP’s actions only strengthens their conviction that managementand the Board have an agenda that is in direct opposition to the interests of the non-management limitedpartners, who own more than 98% of the Common Units.Quicksilver also suggested BBEP can repay debt by reducing G&A expense, specifically citing the high cost of maintaining two corporate offices in Houston and LA when the assets managed by these offices are inMichigan, Indiana, Kentucky and Wyoming. Comment:   See additional comments re: investor Baupost Group above.   Chemed Corp. (CHE)  Activist Investor: MMI Investors   Investor Info Catalyst Info Shares 800,000% Outstanding 3.5%Cost Basis Not Avail Company Info Share Price 42.22Revenue 1.2BMarket Cap 945MEnterprise Value 1.1BNet Cash -147MEBITDA 164M52 wk. range 29.00 – 50.79EV/EBITDA 6.7 Catalyst:  On April 28 MMI issued a letter to CHE shareholders comparing their five board nominees to the Company’sincumbent directors.On April 29, CHE issued a press release stating that MMI’s nominees have been nominated only to advanceMMI’s agenda and that their nominees would add nothing to the board. Comment:   We previously covered CHE in our February 13 Catalyst Research Report, highlighting MMI’s demand that CHE pursue a tax-free spin-off of one of its two businesses - Roto-Rooter. MMI believes the spin-off could lead to potential value creation of 40% - 70%. MMI is attempting to replace five of eleven directors up for election at the May 29 annual meeting. CHE hashired Lazard Frères and JP Morgan as financial advisors.   CH Energy Group (CHG)  Activist Investor: GAMCO Investors   Investor Info Catalyst Info Shares 1,270,277% Outstanding 8.0%Cost Basis Not Avail Company Info Share Price 46.45Revenue 1.3BMarket Cap 733MEnterprise Value 1.2BNet Cash -449MEBITDA 117M52 wk. range 33.39 – 52.66EV/EBITDA 10.3 Catalyst:  On April 27 CHG entered into a settlement agreement with Gamco. Under the terms of the agreement CHGwill appoint one individual nominated by Gamco to an expanded board of nine. Comment:   We previously covered CHG in our February 20 2009 and November 28 2008 Catalyst Research Reports,highlighting Gamco’s announcement that they intended to submit one or more nominees for director to theboard of CHG at the next annual meeting. On February 18 Gamco nominated three individuals for election toCHG’s board.
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