The offer by CPOF is a 35% premium to Friday's closing shareprice of $7.01. In early afternoon trading Monday, shares of thecompany were trading at $8.15, up 15% on the day, and had traded ashigh as $8.66 earlier in the day. The company's 52-week range is$6.45-$13.25. In afternoon trading Wednesday, shares were tradingat $8.02, up $0.06 on the day.

In its offer letter, COPF principal Daniel R. Baty stated thatCOPF could accomplish its necessary due diligence review within 60days. "We are prepared to proceed immediately with discussions andour due diligence review in anticipation of signing a definitivemerger agreement upon the execution of a confidentialityagreement," he states.

SEC filings show that private discussions between ColumbiaPacific and the Red Lion board began in April but were broken offby Red Lion without agreement on a buy-out, according to Loeb. "Assuch, we expect this is likely just the beginning of the story," hetold clients Monday.