Despite a bankruptcy filing by home builder WCI Communities, its chairman may just have a reason to smile.

Carl Icahn has to be glad he did not end up buying all of WCI Communities last year.

In March 2007, after talks with the company did not go anywhere, the activist investor launched a tender offer for all WCI shares at $22 each, but the company’s board at the time rejected it. The billionaire investor instead ended up as chairman of the company after a protracted proxy battle.

Turns out, that was the better outcome for Icahn, although it wasn’t his finest hour in demonstrating a Midas touch for shareholders.

WCI has now filed for Chapter 11 bankruptcy protection after failing to obtain financing to stay afloat. Icahn said in a statement, “The company, with all diligence, has attempted to avoid a bankruptcy filing. However, the filing became necessary.”

The luxury builder, whose business is concentrated in Florida, one of the states hardest-hit by the housing downturn, sought bankruptcy protection after failing to meet an Aug. 5 deadline for restructuring $125 million in convertible bonds.

Its shares plunged 48 percent to 66 cents a share.

Of course, the company’s bankruptcy has cost Icahn, who this past week had better luck with some of his other holdings like ImClone (although he is so far turning his nose up at Bristol-Myers’ offer to buy the chunk of the biotech company it doesn’t already own). He still owns about 15 percent of WCI, or about 6 million shares. But it sure beats owning the entire thing.

(Photo credit: Reuters)

Following the standard corporate merger playbook, ImClone Systems and its chairman Carl Icahn have called Bristol-Myers Squibb’s $60 per-share takeover offer “inadequate.” Doesn’t it seem like just yesterday Bud brewer Anheuser-Busch was saying the same thing about InBev’s bid?

The two companies have strong links– Bristol already owns about 16.6 percent of ImClone and is seeking to buy the rest. Their relationship has been centered on Erbitux, a drug approved for colorectal and head and neck cancer in the United States and Canada. Now the relationship, like so many other M&A talks, looks like it could turn nasty. No mention of business dealings with Cuba yet, but stay tuned.

Carl Icahn has said he was disturbed that one of ImClone’s directors was also a Bristol designee, leading ImClone to look into whether Bristol got confidential information about the company. And now Bristol is claiming it has rights to Erbitux’s successor.

Across the Atlantic, another deal is also on the fast track to acrimony. Germany’s embattled Continental, which makes everything from tires to brakes, is trying to fend off unwanted advances from Schaeffler by seeking a white knight to save the company. Last week Schaeffler launched an $8 billion hostile takover bid.

*Other deals of the day:

** A back-office unit of India’s Essar Group has agreed to buy Los Angeles-based PeopleSupport Inc for about $250 million in an all-cash transaction, enabling the Indian firm to tap fast-growing new outsourcing markets.

** Spanish utility Gas Natural said it had agreed to sell 19.6 percent of its Argentine subsidiary to pharmaceutical group Chemo for $56 million.

** Swedish pharmaceutical firm Meda said it would buy a large chunk of American Valeant’s European operations for $392 million, boosting its presence in Britain and giving it an entry into Russia.

** Australian financial services firm AMP Ltd will pick up 29 percent in the infrastructure unit of construction firm Gayatri Projects Ltd,  the Indian firm said.

** British drugs retailer and wholesaler Alliance Boots announced its first foray into Latin America, saying it had agreed to buy a 25 percent stake in Brazilian pharmaceuticals wholesaler Athos Farma.

** British utility Centrica said it might revive plans to merge with British Energy  after French group EDF’s 12 billion pound ($23.6 billion) bid for the nuclear power firm stalled.

** Newmont Mining Corp <NEM.N> on Monday said it was considering strategic options, including a sale, for its 50 percent stake in Kalgoorlie Consolidated Gold Mines (KCGM), one of Australia’s largest gold mines.

Fresh from having announced the end of its leasing programs, Chrysler Financial’s credit line is shrinking. The 20 percent cut in its credit facilities to $24 billion makes plenty of sense, given their downsizing, and on Friday it said its lenders were happy with the move to drop leasing. But The Wall Street Journal says Chrysler couldn’t actually get the whole $30 billion. It also says the automaker is paying a far more chunky 1.1 to 2.25 percentage points over Libor on different parts of the funding, from 0.3 to 0.5 percentage point on its borrowings a year ago.

Labor issues are a whole lot more dangerous to a deal in Germany than most other Western economies. So when Volkswagen’s senior labor leader says talks to agree on workers’ rights in Porsche’s new holding company are in danger of collapse, it’s probably time to check the engine. Responding to accusations from his Porsche counterpart that VW labor was blocking a deal, Bernd Osterloh said Zuffenhausen-based Porsche aimed to create a two-class system in which 12,000 Porsche employees outranked VW’s massive workforce. “If the 360,000 men and women working in the Volkswagen Group were of the opinion that a labor contract has to be terminated, Porsche representatives in the holding’s works council could then prevent this, according to the plans in Zuffenhausen,” he said in comments sent to Reuters.

Other deals of the day:

* Australia’s biggest port and rail operator, Asciano, rejected an unsolicited private equity bid worth around A$2.9 billion ($2.7 billion), saying the offer undervalued its business.

* Dutch food group Nutreco said it bought premix and specialty food company Biofaktory for about 10 million euros ($15.77 million).

* HSBC said it was ready to submit an updated application to South Korean authorities on its bid for Korea Exchange Bank, while a regulatory official said HSBC had been in negotiations to cut the purchase price.

* Russia-focused oil company Imperial Energy said it has received another approach for a possible cash offer for the company.

The last-minute collapse of the 12 billion pound sale of British Energy to EDF raises the question of how well banks behind the deal were plugged in with major shareholders, who ended up vetoing the acquisition.  

Having worked on a sale for months, banks were told by private shareholders EDF’s bid of around 775 pence per share was too low. The news clearly left all the parties in disarray.

Such deals are always risky, but the withdrawal of major British Energy shareholders after months of haggling over the price suggests a full-blown row. After all, an indication of where the price was heading had been floating around for at least a week. 

A source told Reuters that British Energy shareholder Invesco was involved in the decision. Prudential was another, according to media reports. Merrill Lynch advised EDF, while Rothschild advised British Energy and UBS the British government, a major shareholder in the nuclear generator.

If a deal cannot be revived, British Energy has said it will look for partnerships with other companies. Some even think Britain’s Centrica may now renew its plans to bid for British Energy, which is 35-percent owned by the British government.