MID-DAY DEAL ROUND-UP 

A123 Systems, a Massachusetts maker of lithium-ion batteries filed today for a $175 million IPO, despite a week that has seen three more IPOs struggle. China Mass Media International Advertising started the week off by halving its IPO, then Rhino Resources, a coal company, pulled its IPO on Thurday. And on Friday morning, Rackspace Hosting saw its shares sink in their debut. 

Sprint Nextel is in talks to sell its iDen wireless network to either NII Holdings Inc  or private equity investors, according to CNBC, which that a sale of the network, which is used by public safety and construction workers, was not expected any time soon and did not name any sources for the report. The news comes a day after the embattled No. 3 U.S. wireless service canceled a $3 billion convertible sale it had announced the day before.

Elsewhere on the deals front, British Airways is confident it can submit an application to to get antitrust immunity in the U.S. for an alliance with American Airlines. American Airlines and BA already have an alliance through the 10-member oneworld alliance, but have twice tried and failed to win antitrust immunity for it.

3i is planning to sell its entire U.S. venture capital portfolio, or maybe only just a bit of it, according two conflicting sources cited by Private Equity Hub, which guesses it will only be a small part of the portfolio, since the sale is designed to generate about $100 million. 

Other deals of the day:

** Ford Motor Co has ended a plan to sell an interiors plant to parts maker Johnson Controls Inc because the downturn in the U.S. auto sector has made pricing the deal hard, the automaker said.

** Malaysia’s Maybank has bought another 5 percent of Pakistan’s MCB Bank for about 703 million ringgit ($213 million), raising its stake in the South Asian nation’s biggest lender to 20 percent, it said.

** Swiss luxury goods maker Richemont and South Africa’s Remgro said they are to spin off their jointly held 30.1 percent stake in British American Tobacco

**  Indicative bids for General Electric Co’s potential sale of its Australian mortgage business are due next week, but bankers do not expect a stampede as likely buyers grapple with the fallout of a global credit crisis.

** Spanish oil company Repsol and Portugal’s Galp denied a newspaper report that they were negotiating a possible merger.

The great auction-rate securities blood-letting banks have begun might well fill the bath if a lawsuit from Europe’s largest computer chip maker against Credit Suisse taps a legal vein. STMicroelectronics says the bank placed $450 million of its cash into auction-rate securities without authorization, and that there’s a lot more where that came from. “At least a dozen other multinational corporations are victims of the same scheme carried out by the same group of brokers and directors at Credit Suisse Securities and furthered by Credit Suisse,” the chip maker contends, adding that it believes more than $2 billion of these clients’ money ended up invested in auction-rate securities. Interesting that Credit Suisse should choose today to reinitiate coverage of the IT hardware sector with a “neutral” rating. Guess they aren’t taking a view of whether the challenge will be successful.
A 5.9 billion pound ($11.4 billion) writedown on risky assets sent Royal Bank of Scotland to a first-half loss of 691 million pounds – better than feared, but still one of the biggest losses in British history. RBS, Britain’s second-biggest bank, said the loss was “a chastening experience” but it was building a comfortable capital cushion and sales of assets were going as planned, although tough financial and economic conditions would continue.

Indicative bids for General Electric’s potential sale of its Australian mortgage business are due next week, but bankers do not expect a stampede as likely buyers grapple with the fallout of a global credit crisis. GE’s advisers, JP Morgan and Citigroup, have sent out information memorandums (IMs) to about 10 interested parties, including domestic and foreign banks. Commonwealth Bank of Australia, the nation’s second-biggest lender, was unlikely to bid, one industry source told Reuters. It declined comment. “People have had the IMs for a while … and they have to respond with interest next week,” said one person with direct knowledge of the matter. In May, GE said it was considering strategic options for Wizard Home Loans, a non-bank lender owned by GE’s financial services arm, GE Money. Local media have said GE Money paid about A$500 million ($455 million) to buy Wizard from its founder Mark Bouris in 2004.

Other deals of the day:

* Australia’s Newcrest Mining said it acquired an initial 30 percent stake in a Papua New Guinea gold mine joint venture, paying around $230 million to partner Harmony Gold.

* British investment company Guinness Peat Group said it sold its 29.7 percent stake in mid-sized insurer Tower Australia to Japan’s Dai-ichi Mutual Life Insurance.

* The controlling shareholders in Italian fashion group Mariella Burani launched a partial buyout offer for a 15 percent stake, bidding 17.5 euros per share

Is silver-haired media investor Mario Gabelli playing matchmaker?

In an interview, he says that it’s about time Cablevision get down to business and hook up with Time Warner Cable. Gabelli, who runs hedge fund Gamco Investors,  a top Cablevision shareholder, tells Bloomberg the family run cable operator and networks company should be “making love with Time Warner Cable.”

Gabelli’s proposal goes much further than the potential moves proposed by Cablevision CEO Jim Dolan. Not content with just a stock buyback or a dividend or even just spinning off some businesses, Gabelli suggests Cablevision should do nothing less than break up the company and hand over the cash to shareholders.

It’s no secret how Time Warner Cable has coveted Cablevision’s New York area cable systems. On more than several occasions over the past decade, Time Warner has held talks to varying degrees to snatch the systems.

From Bloomberg: “They have made a commitment to follow through,” said Gabelli, who two days ago called on Cablevision to sell Rainbow and use the money to buy back stock. “If they don’t, there are board seats available.”

We bet he’ll be pressing his case at a series of investors meetings the Dolans are planning to hold with top investors.

And how happy would he be if Jim Dolan came through this time?

Bloomberg: Breaking up the company would be “like hitting a grand slam home run in the bottom of the ninth inning of the seventh game of the World Series,” he said.

(Photo: Reuters)

Citi’s warm embrace of auction-rate securities has come back to haunt it. The bank, by far the largest underwriter of auction rate munis, a major subset of ARS’s, today agreed to buy back more than $7 billion worth of ARSs,and pay $100 million in fines. Other banks facing accusations of fraudulent marketing of the now unwanted securities, include Merrill Lynch and UBS, the Swiss bank.

American International Group shares tumbled another 17 percent on Thursday, the day after the insurer reported its third multibillion-dollar quarter loss. Total losses for the last three quarters now amount to $18 billion, fueled by a portfolio of mortgage-backed debt. The performance prompted AIG boss Robert Willumstad, a former COO at Citigroup, to say “a less complex AIG will be a better competitor.” He will reveal how much less at a September 25 shareholder meeting.
Deals of the day:
** Russia’s United Company RUSAL will not fully merge with Norilsk Nickel before conducting its own share float and has no desire for a triple merger with steel firm Metalloinvest, its majority owner said on Thursday.

** Japan’s top securities firm Nomura Holdings Inc is in talks with British mid-cap stock broker Collins Stewart on a possible buyout, sources familiar with the matter said on Thursday.

** South Africa-focused platinum producer Lonmin said it would vigorously contest a $10 billion bid approach from miner Xstrata, but gave little sign of what steps it might take in its defense.

** Dutch utility Essent, which is looking for a foreign partner, said on Thursday profit from continuing operations slipped 4 percent in the first half of 2008. Nuon, the second largest Dutch utility, is also looking for a foreign partner. Last year, the two called off a 24 billion euro merger, with local media saying they could not agree to the size of their respective stakes in a merged entity.

** Leading Turkish media group Dogan Yayin Holding said on Thursday its Smile Holding retail business and U.S. firm Brightstar Corp had agreed to form a joint venture.

** Salzgitter raised its stake in Europe’s largest copper smelter, Norddeutsche Affinerie, to 10.8 percent by acquiring the city of Hamburg’s 5 percent holding, Germany’s second-biggest listed steelmaker said on Thursday.

** British mail order company Flying Brands said it has received a “very preliminary” takeover approach from West Coast Capital, the buyout firm co-founded by retail entrepreneur Sir Tom Hunter.

** Germany’s Continental is looking for allies in Asian emerging markets and Russia as a suitable white knight to fend off a hostile bid from rival Schaeffler, sources close to the matter said.

By most accounts, the sovereign wealth funds of Asia are licking their burnt fingers after picking up big stakes in sickly U.S. financials. So we read with interest a report in the NY Post that Lehman Brothers CEO Dick Fuld has held talks with South Korean and other Asian investors about possibly raising more capital. Smell a little Déjà vu? This would certainly be a hard sell for Fuld and Co., but with the dollar showing signs of recovery, and a dearth of cheap alternatives, they could just be tempted to try to catch the proverbial falling sword yet again, further confounding the conservative investment strategies they’ve built up over the past few decades of wealth generation.

What would you call a midsize Chrysler/Nissan car – a Chryssan, a Nissler? Ok, so neither is particularly witty or catchy, but branding is probably not behind what the two automakers are up to. The Wall Street Journal reports the automakers will jointly produce midsize cars, after agreeing in April that Nissan would build a small car for Chrysler using the North American automaker’s design and Chrysler would build a new full-sized pickup truck for the Japanese automaker using Nissan’s plans. The two companies have since been discussing an agreement under which Nissan would produce midsize sedans that Chrysler would sell in the U.S. under its own name, the Journal said, citing people familiar with the matter. Chrysler is evaluating whether it makes financial sense to partner with the company, the paper said.

Other deals of the day:

* Montagu Private Equity has hired Morgan Stanley to look at strategic options for BSN Medical, a move which could lead to a sale of the business for up to 1.7 billion euros ($2.64 billion), a person familiar with the situation said.

* Germany’s Deutsche Lufthansa is interested in holding intensive talks over a stake in Austrian Airlines with the Austrian government, executive board member Stefan Lauer said.

* HSBC Holdings denied a South Korean media report saying it had agreed with U.S. private equity firm Lone Star to set a new deadline for a $6.3 billion deal for control of Korea Exchange Bank.

* Neptune Orient Lines said it could finance a multi-billion dollar bid for rival Hapag-Lloyd, in spite of a 19 percent profit fall due to higher costs and tougher conditions which prompted investors to dump its shares.

United Parcel Service won’t deliver a deal for rival TNT. The top global logistics company told Reuters in an interview that paying billions for TNT would devalue its own shares. Shares in Europe’s No. 2 mail and logistics firm leapt more than 6 percent on Monday after a Sunday Telegraph report that UPS was planning a 10 billion euro ($15.2 billion) bid. You can return that to sender, as UPS said it’s now looking for acquisitions within China, the world’s fourth largest economy, despite fears that Chinese growth will taper off over 2008 and 2009. UPS will be opening two $180 million transport hubs in China and wants to nearly quadruple its staffing there in the next few years.

Waste Management Inc, the largest U.S. trash hauler, said on Monday it has raised its rejected bid for rival Republic Services Inc by nearly 10 percent, to $6.73 billion. Under the revised offer, Waste Management would acquire all outstanding shares of Republic for $37.00 each, a 32.6 percent premium to Republic’s share price prior to Waste’s first takeover bid. That’s not likely to bring a smile to the face of Bill Gates, a major Republic shareholder through his investment arm, BGI, who last month asked Waste Management to walk away. BGI didn’t mince words in its letter to Waste Management’s CEO and board: “We can only assume your ill-timed and poorly conceived pursuit of Republic is designed to disrupt what you perceive as a competitive threat to your position in the market.”

GATX Corp is offering more than $3 billion for General Electric Co’s rail car leasing business, a source familiar with the discussions said. GATX is the leading bidder for the unit and negotiations are ongoing, the person said. A GE spokesman declined to comment. GATX was not immediately reachable for comment.

Other deals of the day:

* South Korea said it plans to sell a 49 percent stake in state-owned Incheon International Airport Corp, worth about $2 billion, to global airport operators as part of a drive to privatise and reform state-run companies.

* U.S. energy firm Marathon Oil Corp is selling a 20 percent stake in an Angolan oil field that could fetch almost $2 billion, attracting bids from China’s top three oil firms, India’s ONGC and Brazil’s Petrobras, sources close to the matter said.

* Media, entertainment and events group First Artist Corp said it agreed to acquire U.S.-based advertising agency Spot and Company of Manhattan Inc in a reverse takeover for up to $18.86 million in cash.

* Russia’s Gazprom Neft will offer Kazakhstan a stake in one of its own projects in exchange for a 49 percent stake in Kazakh oil firm MangistauMunaiGas (MMG), a senior Gazprom Neft official said.

* Kazakh miner Kazakhmys has increased its stake in domestic peer Eurasian Natural Resources Corp to 25 percent, but has no plans to launch a bid for now, it said.

* Dubai Mercantile Exchange, a joint venture between Oman, Dubai and the New York Mercantile Exchange, said it had sold a 20 percent stake to several financial institutions and energy traders.

* Debt-ridden French drinks group Belvedere is considering selling its Marie Brizard liqueur unit to refocus on its vodka business, business newspaper Les Echos reported, citing several sources.

* Australian farming cooperative Murray Goulburn has made a solo bid for dairy producer Dairy Farmers after its consortium with Italy’s Parmalat fell apart last week, a source familiar with the situation said.

Pity the guys who dreamt up two of Wall Street’s coolest tickers — DNA and BUD — both of which look set to be consigned to the dustbin of history.

Genentech grabbed the three letters synonymous with biotechnology by being in on the ground floor of the gene revolution. Anheuser-Busch was lucky enough to have a beer brand known everywhere by one syllable. Now both look doomed.

Genentech faces a $43.7 billion bid from Roche for the 44 percent of the Californian biotech group that it doesn’t already own. Genentech is expected to succomb, albeit after a possibly sweetened offer. Anheuser has already agreed to a $52 billion takeover by InBev.

Their demise may take some of the fun out of stock trading – but investors shouldn’t despair. The thoughtful punter still has other options.

For example:

- BID for auctioneer Sotheby’s

- HOG for Harley-Davidson

- TAP for brewer Molson Coors

- JAVA for Sun Microsystems

- CAR for Avis Budget

- PZZA for pizza company Papa John’s

- BLUD for blood test group Immucor

- LUV for Southwest Airlines (after its Love Field airport in Dallas)

- LVB for Steinway Musical Instruments (after Ludwig van Beethoven)

- LIZ for Liz Claiborne

- PUB for Britain’s Punch Taverns

- WOOF for pet healthcare provider VCA Antech…does that take the biscuit?

And not forgetting the grandaddy of them all:

- T for AT&T (it stands for telephone, of course).

Genentech, meanwhile, will at least keep one thing when it becomes part of a Roche — an ultra-cool address at 1 DNA Way, South San Francisco.

(Photos: Reuters)