NEW YORK ( TheStreet) -- Shares of Zoran ( ZRAN) were soaring 14% to $10.62 Tuesday afternoon after British wireless-chip maker CSR said it will acquire the semiconductor company for $679 million in a stock-swap deal.

The deal represented a 40% premium to the company's closing price on Friday. CSR said it expected the deal to boost profit per share by 10%. Zoran shareholders will receive 1.85 CSR shares for every Zoran share owned.

Zoran's largest shareholder, Ramius has, however, said the deal undervalues the company. Ramius, which holds a 9.3% stake in the company, is calling for the replacement of six members of the board with its own candidates.

"We are suspicious that the announced merger with CSR may be yet another attempt by the current board of Zoran to usurp the will of the shareholders," Ramius said in a press release.

The stock of Mentor Graphics ( MENT) jumped 8% to $15.67 after activist investor Carl Icahn offered to buy the company for $17 per share. "We believe that our fellow shareholders should have the opportunity to accept our offer or a higher one, if one emerges as we think it will," Icahn wrote in a note to the company's board of directors, included in the filing.

The stock of Fonar ( FONR), manufacturer of MRI scanners, was seeing unusual activity Tuesday after it declared its fiscal second-quarter results. Shares were skyrocketing 68% to $2.26 on volume of 3.2 million. The average volume in the last three months has been about 120,000.

The company swung to a profit in the quarter ended Dec. 31, 2010, reporting a net income of $1.4 million, compared with a net loss of $1.3 million in the year-ago quarter. Total revenue for the second quarter of fiscal 2011 ended Dec. 31 was $8 million compared with $8.2 million for the same year-ago period.

The Nasdaq has threatened to delist the company for failure to comply with various listing requirements. Fonar has requested a hearing before the Nasdaq panel on Feb. 24.

Office Depot ( ODP) saw its shares rising 1.1% on double its average trading volume after it reported a narrower fourth-quarter loss and beat expectations on adjusted earnings. The company posted a net loss of $57.8 million, or 21 cents per share, for the period that ended Dec. 25. A year earlier, it posted a loss of $76.7 million, or 28 cents per share.

Excluding restructuring and other one-time charges, the company said it earned 9 cents per share. Analysts were expecting an adjusted loss of 3 cents per share.

Clean Energy Fuels ( CLNE), Silicon Graphics ( SGI), Iridium Communications ( IRDM), Evergreen Energy ( EEE) and Hercules Offshore ( HERO) were among the other big small-cap winners on Tuesday's trading.

--Written by Shanthi Bharatwaj in New York

>To contact the writer of this article, click here: Shanthi Bharatwaj.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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