Since most hedge funds get paid based on their returns for the year, managers who want to get the most out of a stock investment often turn to shareholder activism as a way to increase shareholder value and ultimately boost their returns.

Here at Stockpickr.com, we track all some of the latest activist situations for those interested in possibly piggybacking these activist funds.

The activist investing war continues with Enzon Pharmaceuticals (ENZN), which has fallen from a high of $10 per share to less than $5. Carl Icahn and DellaCamera are both pushing for Enzon to sell parts of itself. DellaCamera has said that it has spoken with investment bank Moelis to "explore alternatives for Enzon."

DellaCamera is now opposing Enzon’s proposed spinoff of the Evivrus biopharmaceutical unit.

On Monday, Enzon management said that it called off plans to spin off its biotechnology divisions. “While we continue to believe that the spinoff of the biotechnology business would be a strategic and value-enhancing plan, the current external market conditions have influenced our decision at this time," said Jeffrey Buchalter, CEO of Enzon.

Recently, Enzon's Oncaspar-IV cancer drug, which treats actue lymphoblastic leukemia, has received orphan drug status in the EU. According to Enzon, this will "block rival versions of the drug from the market for 10 years if regulators approve Oncaspar-IV for sale." While this is not a game-changer, there have been rumors that the company might sell the drug off to a larger European-based drug marker.

What makes Enzon such an interesting activist situation is that there is no middle ground with regards to its current share price. The long activist investors, such as DellaCamera, which owns 6.5%, and Carl Icahn, who owns 5.47%, clearly feel that at current levels, shares of Enzon are incredibly cheap. The mammoth 13.75 million shares sold short against Enzon (a 27.30% short ratio) feel that Enzon is incredibility overvalued.

Enzon trades with a price-to-sales ratio of 1.1 and an enterprise value/EBITDA of 14.

Elliot Associates, which withdrew its offer of more than $450 million to buy out Epicor (EPIC), is now planning on nominating one or more directors to Epicor’s board. Recently, the board suggested that shareholders reject a buyout offer from Elliot, calling it “highly conditional.” Elliot Associates said that it has spoken to “several” potential buyers who have expressed interest in buying Epicor outright but have been “rebuffed by the board.”

Epicor, a licensing-based software company, trades with a forward P/E of 5.6 and EV/EBITDA of 7.6. It has $95 million in cash, and $339 million in debt.

Bill Ackman of Pershing Square has now accumulated ownership of 7.5% of General Growth Properties (GCP) shares outstanding.
Pershing Square has "an additional economic exposure to 12.5% through various swaps arrangements," most likely through total return swaps, which gives Pershing Square the right to receive the return of the asset if operating conditions within General Growth improve within a specific period of time.

Finally, Carl Icahn has increased his ownership in Yahoo! (YHOO) by 6.8 million shares, which is equivalent to 1.3% of the company. Icahn now owns 5.3% of Yahoo!, in hopes of selling the company to Microsoft (MSFT).

Posted on Dec. 3, 2008