Usually, when a hedge fund calls for a company to put itself up for sale, a lot of smoke is being blown and nothing happens (take, for example, the Yahoo!-Icahn situation).

But Sandell Asset Management has been instrumental in getting its investments -- including Sybase (SY), Plains Exploration (PXP) and CBS (CBS) -- to do what it wants.

This time it's no different.

New York City-based Sandell, the largest shareholder of Southern Union (SUG), is calling on the natural gas distributor to put itself up for sale or undertake a major restructuring, including ousting Chief Executive George Lindemann and much of the board

In a letter filed with the Securities and Exchange Commission, Thomas Sandell, head of Sandell accused Southern Union's management of "poor performance, outsized compensation and complacency towards value creation." Shares of Southern Union are down about 25% over the past year.

The Interstate National Gas Association forecasts that domestic demand for natural gas will grow by roughly 30% by 2020. Couple this with rising natural gas prices and Southern Union’s very low historical valuation, and you get a stock that is poised to move much higher. Thomas Sandell believes the company could fetch $32 to $42 per share:

"We believe the current intrinsic value of SUG to conservatively be $35 per share based on a variety of valuation metrics. While an increase in dividends will not meaningfully change the fundamental value of the Company, it will be an important catalyst in helping to narrow the currently large discount to fair value. Moreover, an MLP will provide greater value to stockholders given the tax-efficient nature of the structure, and we estimate the adoption of an MLP is likely to boost SUG's stock to $36-$41 per share,"

Southern Union has been approached more than once about a possible sale in the past two years.

Transportation & Storage: Southern Union boasts approximately 15,000 miles of interstate pipelines with transportation capacity of 7.4 7.4 billion cubic feet per day), as well as North America’s largest liquefied natural gas import terminal with peak send-out of 2.1 billion cubic feet per day and storage of 9 billion cubic feet per day. The company claims to have interests in approximately 88 billion cubic feet of storage

Gathering & Processing: Southern Union operates approximately 4,800 miles of pipelines, five processing plants (four active) with a capacity of 470 million cubic feet per day and eight treating plants (six active) with a capacity of 765 million cubic feet per day.

Distribution & Other: Distribution serves approximately 560,000 customers in Missouri and Massachusetts. PEI Power Corporation owns interests in and operates 70 megawatts of generating assets that supply electricity into the PJM Grid

Southern Union owns 50% of the Florida Gas pipeline -- Florida is a great market to be in because its population is growing very quickly as America’s baby boomers retire to warmer climates. Florida’s summertime weather makes the Florida Gas pipeline highly desirable, it takes an abundant supply of natural gas to keep air conditioners and large commercial freezers working.

Southern Union also owns the largest liquefied natural gas import terminal in the U.S., which has a send-out capacity of 1.8 billion cubic feet of natural gas per day. However, the downside here is that this terminal is located in Lake Charles, La. Any major disruption from a storm would stop all of its send-out capacity (though natural gas would probably spike and more than compensate for this short fall)

Sandell Asset Management said it currently owns nearly 10% of Southern Union, making it the company’s largest shareholder. Southern Union Chairman and CEO George Lindemann is the second-largest shareholder, with about a 6% stake

Sandell has been successful in getting Sybase management to buy back $300 million worth of stock, getting Plains Exploration to sell off assets, and selling CNET to CBS. Other companies in the natural gas space (potential buyers) include Chesapeake (CPK) and Nicor (GAS).

A note from James Altucher:

Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap.

Here are some examples:

Stocks related to drilling the Marcellus Shale

MLPS with yields above 7%

Microcaps trading for less than tangible book

Stocks that do well after Hurricanes

Here's the challenge: Build a portfolio at Stockpickr.com with great analysis, and send me the link. Each great portfolio (with analysis) will get posted on TheStreet.com with your byline (as a "Stockpickr Guest Columnist") and will be included in my email I send to Jim and the other
hedge fund managers on my list.