It will come as no surprise to those following the nearly comatose IPO market in the U.S., suffering through its worst spell in five years , that the time companies spend waiting between filing their paper work and going public has nearly doubled in the past year, according to a report by Ernst & Young.

In the second quarter of 2008, IPOs in the pipeline had been there for nearly six months, while a year earlier the filing-to-IPO wait was just over three months.

“Investment bankers are driving this,” said Jackie Kelley, Ernst & Young’s Americas IPO Leader. “When they aren’t getting enough traction with investors, they are telling companies to wait.”

The quarterly report also found that the average deal size is creeping up, as investors prefer more established, proven companies, Kelley said. In the second quarter, the average deal was $193.3 million, up 3 percent from last year.

As of the end of June, 80 companies were in the pipeline, seeking total IPO proceeds of $15.5 billion (smaller than the total of a single deal earlier this year, Visa’s IPO, which netted $18 billion.) A year ago, the figure was 90 companies seeking $18.2 billion.

The report found more companies are dropping out of the pipeline than going public. But with IPO after IPO getting either pulled or pricing below expectations lately, who can blame them?

It’s become an annual event, like the Oscars or the Super Bowl.

Nearly every year, rumors surface that U.S. steelmaker AK Steel is being eyed as a takeover target by one or more of its competitors. Indeed, since 2003 the company has been linked in various reports to U.S. Steel, Arcelor Mittal, Brazil’s CST and CSN, Russia’s Magnitogorsk Iron & Steel Works, Severstal, ThyssenKrupp and the Evraz Group.

The latest incident came last month, when dealreporter.com reported that ThyssenKrupp, Evraz, CSN, and Severstal have had talks with the Ohio-based steelmaker. ThyssenKrupp later denied it was interested in the company.

So is this year’s round of rumors any different than other year?

Maybe, says independent steel analyst Michelle Applebaum.

“The difference between the company today and even a year ago is that they’ve gone down this path of fixing their employee liabilities,” Applebaum said, referring to the health care and retiree obligations that weighed AK down for years and sent other steelmakers into bankruptcy.

“Foreign acquirers are quite frightened of our pensions and health care system here. Its very different than elsewhere. Those types of liabilities — that are not quite as quantifiable — scared off people,” she said.

Applebaum said companies that either have an excess of steel slab or ones that sell a large portion of their steel to automakers could be interested in AK.

AK Steel was not immediately available for comment.

After four years of recriminations and in-fighting between executives from Sony Music and executives from BMG Music Entertainment, Tokyo-based Sony Corp has decided to end the mutual pain of a controversial merger and take full control of Sony BMG.

Artists like Beyonce, Bruce Springsteen and Justin Timberlake will now record under a new banner: Sony Music Entertainment Inc.

The FT had reported in June that Bertelsmann was looking for $1.2 billion-$1.5 billion for its 50 percent stake in Sony BMG, but it looks like the German media company settled for $600 million to $900 million — the exact sum depends on how you do the math.

Basically, Sony said it is paying $600 million cash to Bertelsmann, which will also get half of another $600 million cash on Sony BMG’s balance sheet for a grand total of $900 million. The deal values Sony BMG at $1.2 billion.

Will full ownership by Sony give the record label a new lease on life? According to Music & Copyright research, Sony BMG ranks second in the music industry with a 20.1 percent market share, behind Universal Music’s 28.8 percent. Here’s what some analysts told our correspondents in Tokyo and London:

Daiwa Institute of Research analyst Kazuharu Miura

Sony BMG is a company whose sales have been on a declining trend. But it has managed to post profits so far thanks in part to its restructuring efforts. There is no reason to see this as particularly negative. But I don’t think this is something that prompts investors to chase Sony shares, either.
Sony’s cash out is $600 million, while Sony BMG has been posting after-tax profit of about $100 million to $200 million. Of that profits, Bertelsmann’s portion will come to Sony after the deal. So, Sony can expect a return of about $50 million to $100 million for a $600 million investment. That is not a bad
investment.

Informa music analyst Simon Dyson

It would appear that Bertelsmann was getting out of the music industry altogether but actually they’ll still deal with some management and rights, which signals that they think there’s money to be made, just not in retail.
I’m probably a little more pessimistic than most people. I’m very sceptical as to whether music sales are going to return to growth for a good five or six years.
Sony is big in music and games, for example with Guitar Hero, for which artists seem keen to sign up. I wouldn’t think that actually owning the music company would need to be a part of it.
BMG on the surface seems to have got the most out of it. But they’re very clever people at Sony, perhaps they’ve got some kind of plan.

Jupiter music analyst Mark Mulligan

This is absolutely related to the fact that the music industry is in a really difficult time. But it has much if not more to do with Bertelsmann refocusing itself. What Bertelsmann really created was a cross-media megalith, trying to do too many things across too many areas. Owning everything isn’t necessarily the best way of getting the most out of a media company.
The timing and the importance of getting this done has been intensified by the state of the music industry. The music industry’s declining but some time in the next couple of years the decline will slow. Digital music sales will ultimately catch up with the rate at which CD sales are declining.

(Photo: Reuters) 

Satellite TV provider Dish Network is mulling another attempt at a merger with rival DirecTV, according to the Wall Street Journal, seven years after regulatory pressures forced them to abandon such efforts. While no concrete plans have yet emerged, the Journal reports the two companies have been discussing the idea for a few months.

Liberty Media Chairman John Malone, whose company effectively controls DirecTV, told CNBC that although he loves the idea, “I think with the current regulatory regime and probably the one that’s going to follow, it’s just not really practical to plan
on something like that.”

Cablevision is open to pretty much any idea to shore up its sagging shares, including spinning off one of its units, the company said on Tuesday. In fact, it plans to hire investments banks to evaluate spin off at least one if its businesses. The news sent shares up 7 percent.

Hedge fund Citadel Investment Group LLC has jumped into the fray of the soured $10.6 billion merger plan between Huntsman Corp and Hexion Specialty Chemicals, www.thedeal.com reports. In a regulatory filing submitted Friday, Citadel mentioned providing financing through an investment in Hexion, the buyer in the stalled merger, to help things move along.

OTHER DEALS OF THE DAY:

** Sony Corp agreed to purchase its 50 percent stake in Sony BMG music unit from joint venture partner Bertelsmann,  the two said in a joint statement on Tuesday. No sale price was disclosed but a source close to the company said the deal had a transaction value of $1.5 billion. The music company, which will now be called Sony Music Entertainment Inc. (SMEI), will become a wholly owned subsidiary of Sony Corporation of America.

** Katanga Mining which is developing Africa’s biggest copper mine, has agreed a new joint venture deal with Congo’s state mining group Gecamines, the firm said on Tuesday. The two sides signed a memorandum of understanding affirming ownership in the joint venture would remain at 75 percent for Katanga and 25 percent for Gecamines.

**  Switzerland’s Adecco, the world’s biggest staffing group, has made a bid approach to Michael Page, sending shares in its UK rival up by over a third to give it a price tag above $2 billion.

 ** Austrian government leaders said they would only sell their stake in Austrian Airlines if another domestic investor buys a core shareholding in the company, limiting the stake available to foreign airlines.

**  Norway’s Skagen AS investment fund has acquired a 5.2 percent stake in Hungarian drug maker Richter Gedeon, Richter said on Tuesday in a filing with the Budapest Stock Exchange.

** Russian billionaire Mikhail Prokhorov agreed a $10 billion cash-and-stock deal to gain control of Polyus Gold and allow ex-partner Vladimir Potanin to own almost half of miner Norilsk Nickel.

** IGM Financial Inc will buy smaller Canadian investment-management firm Saxon Financial Inc in a friendly cash deal worth about C$287 million ($276 million) that will boost IGM’s assets under management, the companies said on Tuesday.

As banks and other financial institutions continue to bleed, they will be forced to bring out some of the fine china — and probably sell it on the cheap.

That’s the latest prediction about asset management transactions in the coming year, according to Jefferies Putnam Lovell.

Aggregate deal value and assets under management changing hands is expected to rise and deals will likely feature several larger financial institutions forced to sell their asset management units over the next 12 months, although overall deal activity is likely to continue at the pace of the first half of this year, according to the Jefferies & Co unit that focuses on the financial services industry.

In the first half, buyers committed about $10.6 billion to buy stakes in 104 fund managers, down from $36.9 billion spent on 115 deals in the year-earlier period. About $909 billion of assets under management have changed hands so far this year, compared with $1.23 trillion during the same period last year, according to Jefferies Putnam Lovell.

‘’Pursuit of non-traditional investment products, international expansion, and attempts to restore balance sheets at banks and other financial institutions will drive asset management deal-making activity in the months ahead,” said Aaron Dorr, a managing director at Jefferies Putnam Lovell.

Indeed, a recent Wall Street Journal report said National City was trying to sell its Allegiant Funds unit, which manages about $30 billion, while Fifth Third Bancorp was reviewing options for its asset management unit.

Deals over the coming year, however, are likely to take longer to complete and run a higher risk of collapse, Jefferies Putnam Lovell said.

Buyers — with private equity firm likely to get more active — will likely become more discerning, and aggregate multiples for asset managers will soften slightly, reflecting a larger number of forced sales and sales of lower quality businesses, it said.

(Photo credit: Reuters)

Hey, did someone mention hanging chads?

Not yet, but one of Yahoo Inc’s largest and most critical shareholders, Capital Research Global Investors, has asked for a probe of last week’s shareholder vote, which was widely seen as a pat on the back for Chief Executive Jerry Yang.

Yang, who has been under pressure since Yahoo and Microsoft failed to agree to a deal, received 85.4 percent support in the results announced on Friday, with the remaining votes withheld in protest.

“I guess Jerry Yang didn’t come out of the meeting as unscathed as it seemed,” Canaccord Adams analyst Colin Gillis said of the uncertainty raised by calls for a recount.

The New York Times describes the situation this way: “The recount was requested because the total number of votes cast appeared too low, according to a person with knowledge of the matter who asked to remain anonymous because he was not authorized to discuss it. The person said that Capital Research believed that any undercounting of votes was most likely due to a technical mistake, not any tampering with the vote.”

Questions over the vote – first reported by the D: All Things Digital blog – is the last headache Yang/Yahoo need. Yang’s position seems secure, even if the final vote count changes somewhat. But the point is that the company is still trying to put the Microsoft mess behind it, and would clearly rather avoid any more bad publicity.

Keep an eye on:

• Under a deal with the International Olympic Committee, YouTube will provide about three hours a day of exclusive content during the Games (WSJ.com)
• Friendster, the social network site, got a new chief executive and $20 million in financing (Silicon Alley Insider)
• Motorola tapped semiconductor industry executive Sanjay K. Jha to head its troubled mobile phone division and share chief executive duties for the entire company (NY Times)

(Photo: Reuters)