August is traditionally a quiet month for M&A, as bankers head out to the Hamptons or further afield. This year could prove especially quiet as people make the most of the slow dealflow — particularly on the private equity side — to take longer than usual breaks.

But even as Wall Street slows down for the summer, a few auctions are showing signs of life. The effort to sell Irish drugmaker Elan’s drug delivery unit is one sale that is hotter than most, according to bankers. First round bids went in last week and a number of U.S. private equity names are said to be keen on the asset, which could fetch $1.3 billion to $1.4 billion.

Also still in play through the dog days of summer are Reed Elsevier’s Reed Business Information unit, with first round bids due this week expected to range from $2 billion to $2.5 billion, and Rio Tinto’s U.S. coal assets.

With the prospect of sharply decreased bonuses, summer trips may be a little less posh this year. Have you downgraded from the Hamptons or made other cost-cutting vacation plans? Tell us in comments.

Jay Sidhu is back.

The former chief of Sovereign Bancorp has a tentative deal to invest $30 million in Federal Trust Corp and take control of the small Florida-based savings and loan. Federal Trust Bank operates 11 full-service offices and had total assets of $639.8 million as of June 30.

About two decades ago, Sidhu started down a similar path, when he took over as chief executive of Sovereign. By the time he left had transformed a $400 million Pennsylvania thrift into a regional bank with some $89 billion in assets and 800 branches, stretching from Maryland to Boston. Under Sindhu, Sovereign acquired more than two dozen banks and branch networks divested by bigger banks.

But Sidhu, who stepped down from the bank in 2006, was also a magnet for criticism. Disgruntled investors complained about Sovereign’s stagnant share price, and his agreement to sell a minority stake to Spain’s Santander and simultaneously buy Brooklyn, New York’s Independence Community Bank Corp.

Critics also decried Sovereign’s corporate governance, accusing Sidhu of controlling his board by granting directors exorbitant pay and lucrative inside deals.

The New Delhi native has apparently been planning a comeback. He controls Sidhu Advisors, an investment vehicle. And in March, he filed with regulators for an IPO of Sidhu Special Purpose Capital Corp, blank-check company, to raise up to $150 million.

If past is prologue, he’ll use Federal Trust as a platform for acquiring more banks. And along the way, he’ll no doubt attract some pointed criticism.

(Photo credit: Federal Trust logo from PR Newswire)

The latest in ten-digit red ink has landed, this time from JPMorgan, which said in a regulatory filing late on Monday that it had lost about $1.5 billion since July. It cited the usual culprits: turmoil in the credit and mortgage markets and wider credit spreads and lower levels of liquidity. JPMorgan’s shares were down more than 4 percent at the open. JPMorgan has written down a total of about $33 billion, and total write-downs since the credit crunch started have been about $341 billion.

Mitsubishi UFJ Financial Group, Japan’s largest bank, said it would bid $3 billion to buy the remaining 35 percent of California’s UnionBanCal, as it looks for growth beyond its softening home market. The purchase represents a significant bet by Mitsubishi UFJ, which is looking to increase its presence in the United States even as the world’s largest economy continues to stumble through the subprime mortgage crisis. Saddled with slow economic growth and a declining population at home, Japanese financials, which have avoided much of the subprime meltdown, are increasingly aiming to boost their small market shares in the West.

Other deals of the day:

* Italy’s Enel said it had bought 10 percent of PT Bayan Resources Tbk for about 138 million euros ($205.5 million) by taking part in the Indonesian coal miner’s initial public offering.

* Adecco said it wants a friendly takeover of British peer Michael Page as the world’s largest staffing firm posted a better-than-expected quarterly net profit and strong margins despite tough economies.

* Singapore steel products maker HG Metal plans to gain control of local rival BRC Asia from the UK’s Acertec, in a deal worth as much as S$100 million ($71 million), sources said.

* The brokerage arm of BNP Paribas, the largest listed French bank, is close to finalizing the acquisition of a Russian brokerage, Pierre Rousseau, chief executive of BNP Securities Asia, told reporters.

** One of the biggest shareholders in Spain’s Reyal Urbis has sold more than half its stake in the property group to Reyal’s chairman and the company itself, stock exchange records showed.

* HSBC Holdings has submitted an updated application to acquire a 51 percent stake in Korea Exchange Bank, South Korea’s Financial Services Commission said.

It is now official — Swiss bank UBS has ditched its much-cherished “One Bank” strategy.

The bank said it would split its business in three autonomous units, after taking yet another credit hit and posting a worse-than-expected second-quarter loss.

The news will spark further talk the bank may hive off business units such as its embattled investment bank. UBS in a conference call would not rule out divestments further down the line, though it said it was not now working on such plans.  

The bank is already Europe’s biggest victim of the credit crisis. Today, it took another $5.1 billion hit on credit positions, bringing the total to $41 billion. More importantly, it saw hefty outflows out of its wealth management business for rich clients.  

The news comes just days after it was forced to buy back billions of dollars worth of auction-rate securities to compensate for client losses in the United States.  

In reply, it is now saying it is “repositioning” itself. It is splitting up its business in three separate units. It is calling its wealth management unit — for rich clients — its “core asset”. It says it will continue to invest in wealth management, but does not put equal stress on its investment bank.

These may be small steps, but markets liked the news. UBS shares were more than three percent up in early trading.  

MID-DAY DEAL ROUND-UP 

During hard economic times, pawn shops are among the few business that typically do well, with people ready to hock family momentos to keep collection agents at bay. So when pawn shop operator Value Financial Services terminated its planned acquisition by lender EZCorp, ending a $110 million cash-and-stock deal, that would have increased that company’s market share in pawn-shop bountiful Florida, EZ Corp shares dropped by 9 percent.

Other deals of the day:

** Terex Corp, a maker of construction, transport and mining equipment, will buy the port equipment businesses of privately-owned Fantuzzi Industries for about 215 million euros ($323 million) to expand its cranes business, Terex said on Monday.

** Diversified manufacturer Illinois Tool Works Inc said on Monday its board has authorized a plan to divest its decorative surfaces segment and its industrial software business.

** Severstal Russia’s largest steel maker, has bought 100 percent of the Balazhal gold mine in East Kazakhstan, the company said on Monday. The mine has estimated recoverable reserves of up to 20 metric tonnes of gold, and a resource potential of up to 30-40 tonnes, Severstal Resources, the mining division of Severstal said in a statement.

** Canada’s Agrium Inc has reached a deal to unload its $1.4 billion Egyptian fertilizer project to a state-owned firm that is building its own nitrogen plant nearby. Under the deal, MISR Oil Processing Co (MOPCO) will acquire the Agrium project through a share swap that will see Agrium take a 26 percent stake in MOPCO, which is about to open its own 675,000 tonne urea nitrogen facility.

** U.S. automaker Chrysler LLC is seeking manufacturing alliances with other automakers in a bid to “generate cash as a smaller company,” Chrysler’s manufacturing chief said on Monday,

We thought we had a big story on our hands this afternoon when an email popped up in our Inbox proclaiming: “Newsday TV”.

Finally, Cablevision Chief Executive Jim Dolan is sticking it to the Doubting Thomases of Wall Street by serving up the synergies between his recent acquisition, the Long Island newspaper Newsday and his 3-million strong subscriber base of cable TV customers and cable networks, we thought.

It wasn’t anywhere close to what we imagined.

Yes, Cablevision has launched a new interactive Newsday channel. But the interactivity pretty much ends with an on-screen subscription form letting cable customers order up a Newsday subscription on TV screens and charged to cable bills.

From the Cablevision release:

Located on Channel 611, the Newsday channel features both 7-day and weekend delivery options (Thursday, Friday and Sunday), and promotional information on the paper’s various sections and benefits, including local news, sports, Long Island Home, area coupons, the Explore LI feature section and classifieds. Also available through the channel are long-form videos of some recent Newsday stories, and information on the paper’s “Newsday Insider” benefit program for subscribers.

Meanwhile Wall Street cable analyst Craig Moffett of Bernstein Research not only thinks there’s little obvious strategic sense in the Newsday acquisition for Cablevision but that the Dolans, who control the cable operator, probably paid $150 million too much for the paper in May.

In his latest client note titled “Toys in the Attic…What’s Cablevision Really Worth?” Moffett says Cablevision is conservatively worth at least $45 a share compared with its current price of around $28.

In the breakdown of Cablevision’s assets Moffett values Newsday at just $505 million – a 20 percent discount in just three months.

No wonder top Cablevision stakeholder and activist investor Mario Gabelli wants improved corporate governance on big decisions and is calling for a sale of some of Cablevision’s asset’s to help boost the share price.

(Photo: Cablevision)

[Editor’s note: This blog post originally referenced a Reuters article reporting that United Parcel Service had dismissed talk of a $15 billion takeover bid for Dutch rival TNT. That article is wrong and has been withdrawn. Reuters accepts that the UPS executive was not commenting specifically on reports that TNT and UPS were in talks.]

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.