It’s been called the Las Vegas of the Gulf, and Dubai’s latest investment move shows that it’s not exactly shying away from that label.

Two government-owned investment firms in Dubai have taken a 20 percent stake in Cirque de Soleil, the colorful Canadian acrobatic troupe, whose sometimes racy shows have been titillating casinogoers in Sin City since 1993.

There’s no gambling in Dubai but that hasn’t stopped the comparisons between the oil-rich desert city’s efforts to expand its tourism appeal and America’s own desert glitz capital. And luckily for Dubai, the similarities end at the two cities’ economies.

Istithmar World and real estate developer Nakheel, two different arms of the investment arm of Dubai World, said on Wednesday they bought the stake in the Montreal-based group for an undisclosed amount.

The remainder of Cirque du Soleil will continue to be owned by Founder Guy Laliberte,  founder of the troupe known for mixing traditional circus acts with dance, music, mime and theatre.

Cirque du Soleil plans to open a show production office, ticketing company, and technical equipment and set design rental company in Dubai.

The move comes as Dubai expands as a vacation destination, complete with its man-made islands and the world’s tallest tower, as it aims to increase visitor numbers to 10 million per year by 2010 from 7 million last year.

The investment agency is also part of a joint venture with casino operators MGM Mirage and Kerzner International to develop a multi-billion resort complex on the famed Las Vegas Strip.

Aside from a push in tourism, we have seen Dubai do other things as well. Istithmar in August bought Barneys New York, and has acquired assets including the W Hotel Union Square in New York and a $1 billion stake in Standard Chartered Plc for Dubai’s government.

Wonder what’s next…?

“Cirque du Soleil marks Istithmar World’s first foray into the live entertainment space, which is a key to our media focus,” David Jackson, chief executive officer of Istithmar World Capital, said in a statement.

With its eyes on media and entertainment, one can think of several U.S. assets that might draw interest from the desert city.

For starters, how about Cablevision, which has hired investment banks to evaluate spinning off at least one of its businesses, which include cable networks AMC, IFC and the Sundance Channel?  

It’s been called the Las Vegas of the Gulf, and Dubai’s latest investment move shows that it’s not exactly shying away from that label.

Two government-owned investment firms in Dubai have taken a 20 percent stake in Cirque de Soleil, the colorful Canadian acrobatic troupe, whose sometimes racy shows have been titillating casinogoers in Sin City since 1993.

There’s no gambling in Dubai but that hasn’t stopped the comparisons between the oil-rich desert city’s efforts to expand its tourism appeal and America’s own desert glitz capital. And luckily for Dubai, the similarities end at the two cities’ economies.

Istithmar World and real estate developer Nakheel, two different arms of the investment arm of Dubai World, said on Wednesday they bought the stake in the Montreal-based group for an undisclosed amount.

The remainder of Cirque du Soleil will continue to be owned by Founder Guy Laliberte,  founder of the troupe known for mixing traditional circus acts with dance, music, mime and theatre.

Cirque du Soleil plans to open a show production office, ticketing company, and technical equipment and set design rental company in Dubai.

The move comes as Dubai expands as a vacation destination, complete with its man-made islands and the world’s tallest tower, as it aims to increase visitor numbers to 10 million per year by 2010 from 7 million last year.

The investment agency is also part of a joint venture with casino operators MGM Mirage and Kerzner International to develop a multi-billion resort complex on the famed Las Vegas Strip.

Aside from a push in tourism, we have seen Dubai do other things as well. Istithmar in August bought Barneys New York, and has acquired assets including the W Hotel Union Square in New York and a $1 billion stake in Standard Chartered Plc for Dubai’s government.

Wonder what’s next…?

“Cirque du Soleil marks Istithmar World’s first foray into the live entertainment space, which is a key to our media focus,” David Jackson, chief executive officer of Istithmar World Capital, said in a statement.

With its eyes on media and entertainment, one can think of several U.S. assets that might draw interest from the desert city.

For starters, how about Cablevision, which has hired investment banks to evaluate spinning off at least one of its businesses, which include cable networks AMC, IFC and the Sundance Channel?  

During the buyout boom of 2006 and early 2007, private equity firms could tap a vast pool of credit to cheaply fund mega-takeovers of $20 billion or more, outbidding corporate suitors that had to justify any deals to shareholders. Now, the tables have turned, according to Blackstone President and Chief Operating Officer Tony James.

As the credit crunch has made it difficult and costly to get funding, private equity firms have lost their ability to finance larger LBOs. The biggest deals that can be realistically financed are about $5 billion, with most deals hovering in the $1 billion range, James said.

Corporate buyers, though, are using cash on their balance sheets to take advantage of slumping stock prices and make acquisitions without the fear of being outbid by private equity firms, James said.

“We’re seeing more competition from strategics than we did in 2006,” James said. “A lot of them view that there’s a pretty benign antitrust environment, and their targets’ stock price is down.”

Corporate deal-making in the U.S. totaled $402 billion in the second quarter, up from $136 billion in the first quarter, Thomson Reuters said. Meanwhile, deals by financial sponsors trailed significantly, totaling $27 billion in the second quarter, and $22 billion in the first quarter.

Blackstone said it committed $2.4 billion of new equity in private equity from April through July. Meanwhile, corporate private equity revenue – including management fees and performance fees – totaled just $92.4 million in the second quarter, down from $400.5 million a year ago. Still, Blackstone’s assets under management increased to $25.08 billion, up from $23.48 billion a year ago.

Private equity firm Blackstone reported lower profits on Wednesday, but still managed to beat estimates. The company sees more investment opportunities coming up despite the choppy equity markets, though Blackstone’s COO Tony James said the credit crunch is making it more difficult to finance leveraged buyouts bigger than $5 billion. That’s a far cry from the $20 billion blockbusters more commonly found in 2006 and 2007.

A new $2 billion oil tanker company will emerge from the union of General Maritime and Arlington Tankers. The two companies said they had agreed to merge in a stock-for-stock combination, with General Maritime shareholders owning 73 percent of the combined company, and Arlington shareholders the rest.

Time Warner said it would split AOL’s dial-up Internet and advertising business into separate divisions by early next year, a move that would make a sale or merger of either business easier.

After Cisco Systems Chief Executive John Chambers said his company is not in talks for any large acquisitions, shares of storage giant EMC Corp dropped as much as 5.4 percent. Chambers said his company’s M&A focus would be on small and mid-sized companies, and focus on partnerships with large companies such as Microsoft and EMC.

The possibility of Carlyle Group following in the footsteps of rivals Blackstone and KKR in going public could face some challenges, according to PE Hub. Carlyle could be stymied by the collapse of its mortgage-backed security investors Carlyle Capital and the upcoming liquidation of its Blue Wave hedge fund, writes PE Hub.

OTHER DEALS OF THE DAY

** French oil major Total SA said on Wednesday it had wrapped up its acquisition of Synenco Energy Ltd after winning over shareholders by raising its bid for the Canadian oil sands developer to C$530.5 million ($506.6 million).

** Brazil’s Votorantim Celulose e Papel said on Wednesday that it would increase its stake in Aracruz Celulose for 2.71 billion reais ($1.7 billion) as part of a plan to merge the two companies.

** Austrian oil and gas group OMV called off its unsolicited $23 billion bid offer for Hungarian rival MOL, saying European Union restrictions were too tough to make the deal worthwhile.

** Acquisitive miner Xstrata unveiled a $10 billion takeover bid for the world’s third-biggest platinum producer Lonmin, aiming to diversify its business from industrial metals such as copper.

** Coca-Cola Hellenic (CCH), the world’s No.2 Coke drinks bottler, clinched a deal to buy family-owned Italian peer Socib SpA for 270 million euros ($418.5 million), expanding in its second largest market.

Freddie Mac on Wednesday posted its fourth straight quarterly loss as it braced for a prolonged housing crisis by setting aside twice as much money for bad loans and setting plans to slash its dividend by at least 80 percent.

The worse-than-expected results come just three weeks after U.S. authorities orchestrated a sweeping effort to prop up the second-biggest provider of U.S. residential mortgage funding and its fellow government-sponsored rival, Fannie Mae.

Click the arrows below to understand how Fannie Mae and Freddie Mac work, and how their troubles could influence the economy and potentially cost the taxpayers billions.

Following an acrimonious and drawn-out takeover battle for Hungary’s MOL, Austrian oil and gas group OMV finally did as expected: it threw in the towel.

Yet according to OMV Chief Executive Wolfgang Ruttenstorfer, the consolidation pressures in central Europe — the strategic rationale which prompted him to launch the unsolicited offer in the first place — remain in place.

Analysts and investors have often pointed out that OMV could do better with the cash then parking it in a MOL stake. And while OMV sat tight and awaited the outcome of its unwanted approach, MOL busied itself stringing together a network of strategic allies, entering into ventures with Cez from the Czech Republic and Oman’s OOC.

Meanwhile, Ruttenstorfer says he is determined to keep his 20.2 percent stake in MOL, at least for the time being — but he did not rule out a sale in the mid or long-term.

With precious few takeover targets in the region in view, there is not much else Ruttenstorfer can do for now. 

For OMV, its MOL stake could be a lever to get,  for example, a share in MOL’s refining business. 

Ruttenstorfer cited Lukoil’s and Gazpromneft’s interest in the region as one example for increasing consolidation pressures. Though any big investor would likely await the outcome of the European Union ruling on MOL’s 10-percent voting cap, which poses a major obstacle to whoever would set their eyes on a takeover of  the Hungarian group. 

Once this issue has been cleared, OMV’s stake in MOL could prove a valuable card in the consolidation game — whether it would be in a match against one of eastern Europe’s energy majors, or even  a retake of the battle between OMV and MOL.

(Reuters photo: OMV Chief Executive Wolfgang Ruttenstorfer)

Yahoo’s Gerry Yang may have thought that giving Carl Icahn a board seat would calm the roiling waters that threatened to pull the chief executive under. But a recount of the vote for its board revealed a strong protest vote against five of nine directors, including Yang. The Internet company said revised vote tallies showed 33.7 percent of votes withheld for Yang, the company’s co-founder. That’s more than twice the opposition to his reappointment to the board as in the disputed first count. Yang has been under pressure for months over failed attempts by Microsoft Corp to buy Yahoo and over questions about his leadership. Analysts were split over whether the recount, while potentially emboldening for critics, was a symbolic embarrassment to the leadership or a new threat to its power. Ahead of the Aug. 1 meeting, Yahoo settled a proxy fight with Icahn, giving the billionaire investor and two members of his proposed slate seats on an expanded board of 11 members instead of the previous nine.

Austrian oil and gas group OMV has called off its unsolicited $23 billion bid offer for Hungarian rival MOL, saying European Union restrictions were too tough to make the deal worthwhile. The move ends an acrimonious year-long standoff between the companies that had begun to irritate some investors and weighed on OMV’s share price. The stock rose nearly 8 percent to a three-week high of 45.60 euros on relief a deal was off. “It was a bad strategic move to make an offer, so this should just narrow the situation,” said Erste Bank analyst Jakub Zidon.

And here’s one from the unwanted advances department: Acquisitive miner XstrataLonmin, unveiled a $10 billion takeover bid for the world’s third-biggest platinum producer, to diversify its business from industrial metals such as copper. South Africa-focused Lonmin swiftly rejected the bid as its shares soared 51 percent to a high of 35 pounds on Wednesday, slightly over Xstrata’s planned offer of 33 pounds a share. Lonmin – and this perhaps is no big surprise — rejected the bid as undervaluing the firm.

Other deals of the day:

* Hunting is to sell its Canadian-based oil and gas division Gibson Energy to private equity firms Riverstone Holdings and Carlyle Group for C$1,270 million ($1.22 billion).

* China’s Tongling Nonferrous Metals said it planned to buy a 51 percent stake in a copper smelter based in Inner Mongolia for 450 million yuan ($65.7 million).

* Newly-formed memory chip maker Numonyx announced a big expansion to its tie-up with South Korea’s Hynix Semiconductor, as the former makes a new push into the NAND memory sector.

* Shares in Sony Corp traded higher after the electronics maker said it had agreed to buy Bertelsmann’s 50 percent stake in their Sony BMG music joint venture for around $900 million.