The Conference Board said its index of U.S. consumer confidence rose more sharply than expected in September to 104.5, up from an upwardly-revised 100.2 in August, as energy costs fell and job prospects improved slightly. This throws a modest kink into the consumer slowdown thesis, so we took a look around to see what other anecdotal evidence might be indicating. In short, it seems like buyouts are the buzzword rather than any overall economic outlook.
TheStreet.com thinks hedgies may be looking to talk Watch List member Guitar Center (GTRC) into going private.

It’s pretty clear to me what Sageview wants management to do: Don’t go into too much debt trying to double or even quadruple the number of stores; rather, take on debt to reduce shares, cut costs and perhaps even go private.

Why go private now? The company has a $1.5 billion enterprise value and cash flow of $180 million, so it trades at a multiple of eight over cash flows and is experiencing growth, albeit not double-digit. In other words, it could take on a lot more debt and comfortably pay it down. This is perfect for an LBO firm looking to help management take it private, even at a premium of up to $50-$55 per share.

Makes sense to us.

Why can’t Valassis (VCI) and Advo (AD) just get along?

Sounds like Liberation Investments wants to “liberate” Multimedia Games (MGAM).

H&R Block shares plunge on loss provision (we warned you about those provision accruals!)

Consumers continued to spend at a stronger-than-expected pace in August as lower gasoline prices helped spur spending in other areas, pushing up retail sales by an unexpected 0.2 percent, a government report showed. Of course, Barry Ritholtz says we should read the fine print. Those strong home theater sales at Best Buy are spurred by 36-month zero-interest financing. But if you hit month 37, watch out! 24% interest - back-dated to the time of purchase!

Normally investors like it when they own stock in a company that is being acquired, as the acquiror often pays a healthy premium for the shares. However, here is a case where both the acquiror and the target are on our Watch List. (For the record, we don’t actually own shares in either Advo or Valassis.) In this case, we will have to see whether the gains for Advo outweigh a likely loss of value at Valassis. Update: The deal was announced, and Valassis has lost $133 million of market cap as of 11:30 AM while Advo shares gained $362 million. The market is saying that the combined companies are worth $230 million more than the individual components, a net positive for the Watch List, but more than 100 percent of the benefit accrues to Advo shareholders.

Valassis in talks to buy Advo for $1.1 bln - WSJ | Reuters.com

Marketing company Valassis Communications Inc. (VCI.N: Quote, Profile, Research) is in advanced talks to acquire Advo Inc. (AD.N: Quote, Profile, Research) for at least $1.1 billion, according to people familiar with the matter, The Wall Street Journal said on Thursday.

The two firms have discussed a deal that offers shareholders of Advo a premium of more than 50 percent of its $763.2 million market capitalization, two people familiar with the matter said, according to the newspaper.

A deal, which could fall apart or have its terms change, would unite two stalwarts of the direct-marketing and advertising business, the Journal said.

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