PE Hub’s Dan Primack writes:

Mitt Romney is probably just days away from being named John McCain’s running mate, and the Democrats are already taking shots based on his time running Bain Capital. During a press conference earlier today in Denver, Obama campaign manager David Plouffe referred to the former buyout kingpin as a “job killing machine in business” who “has been proficient at using tax havens in places like the Cayman Islands that Americans have become increasingly tired of.”

It’s certainly true that Bain laid off portfolio company employees during Romney’s tenue. It’s also certainly true that Bain hired portfolio company employees during Romney’s tenue (particularly at the earlier-stage companies).

So Plouffe was only telling a half-truth, although it’s one we should expect to hear over and over again. This will be particularly true if Romney’s people keep avoiding any actual discussion of Bain Capital, as his spokesman did in response to Plouffe’s comments.

As I’ve written before, I’m thrilled by the prospect of Romney as a vice presidential candidate. Not because of my political biases, but because it gives me something to write about for the next few months. But his former private equity colleagues should be very nervous about what his candidacy would mean for their own reputations and future regulation. The industry was dragged through the mud most of last year, and has largely been forgotten ever since (except in Michigan, thanks to Cerberus/Chrysler). A McCain-Romney ticket will bring it all back with a vengeance.

Singapore wealth fund Temasek may have gotten hold of some bad stuff this year when it bought a 9 percent stake in Merrill Lynch. The stock has lost more than half its value since the purchase was announced in late December. But far from swearing off noxious bank assets, the flush Asian fund says it wants more. And why shouldn’t it? It just doubled its full-year profit by selling assets in local power and its national telecoms and airlines companies, as well by cutting a stake in Bank of China, so the toxicity of Merrill’s share price is not making it sick. Financials grew by two percentage points to 40 percent of its portfolio in the year through March and are likely to grow further, with Temasek saying it expects contagion from the credit crisis to spread. That should keep prices down for a while. Temasek said it will not cap its investments in the sector, but it was mum on whether it was thinking of taking on any Lehman exposure.

India’s largest oil producer ONGC has agreed a 1.4 billion pounds ($2.6 billion) takeover of Russia-focused oil explorer Imperial Energy Corp as it works to secure energy to fuel India’s booming economy. Imperial said ONGC’s overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares in a deal that could double state-owned ONGC’s proved and probable reserves. This is less than the 1,290 pence approach Imperial said last month it was discussing with an unnamed bidder, which sources close to the matter identified as ONGC. Investors aren’t wholly convinced though, with the shares trading down more than 1 percent this morning after rising sharply in recent weeks on hopes for a bidding war.

Infosys Technologies agreed to buy British consultancy Axon Group for 407 million pounds ($753 million) as India’s second-biggest software services exporter looks for growth beyond an uncertain U.S. market. The cash deal values Axon at six pounds per share, a 19.4 percent premium over Friday’s close of 5.025 pounds and 33 percent over the average price of the last six months, Infosys CEO Kris Gopalakrishnan said. The stock has risen to 611, and Infosys shares have taken a hit as expectations rise another bid will emerge. Altium Securities said in a note it believed there was room for a counterbid closer to 700 pence.

Other deals of the day:

* Hyundai Heavy Industries, the world’s top shipbuilder, expressed its interest in Daewoo Shipbuilding, joining three other major bidding groups vying for its smaller rival. State-owned Korea Development Bank (KDB) and a government agency have put up for sale their combined 50.4 percent stake in the world’s No. 3 shipbuilder, in a deal estimated to fetch up to $8 billion, more than double Daewoo Shipbuilding’s current market price.

* Bluescope Steel, Australia’s top steel maker, will sell its New Zealand iron sands mining operation for NZ$250 million ($176 million) to Hong Kong’s Cheung Kong Infrastructure Holdings, the company said.

* Pennar Industries said Hyderabad’s JR Realtor Services had acquired 13 million shares, or 10.28 percent of its share capital.

Lufthansa has said it is interested in acquiring a stake in Austrian Airlines. Austrian state holding company OeIAG has invited bidders for its 43-percent stake in the carrier, worth about $223 million.

It’s a small deal, but it’s a big deal.

If Austrian’s board picks Lufthansa, the German carrier will own nearly half of Austria’s main carrier. And that could spur more consolidation — or partnerships at the very least — among other airlines, analysts said.

Lufthansa, affectionately known as Lufthie, is on a spree. In December, the airline bought a 19-percent stake in JetBlue Airways for about $300 million.

Under U.S. law, no foreign airline can own more than 25 percent of a U.S. airline.  By limiting its stake to 19 percent, Lufthansa remains below federal limits on foreign ownership of a domestic airline.

But the passive investment includes a representative on JetBlue’s board and opens up an opportunity for Lufthansa to make a bigger deal down the road.

Also, the “open skies” agreement is sure to increase competition among carriers — in Europe and in the United States. 

As airlines like Lufthansa take stakes in more airlines, and other carriers hold merger talks (British Airways and Iberia are in merger discussions while the two also entered a partnership with American Airlines earlier this month), airlines not in the middle of any talks could find themsleves left out in the cold.

After a New York Post article reported that Hollywood studio MGM had retained investment bank Goldman Sachs to look into a possible sale or capital raising, the studio issued a statement that it was not for sale. MGM, however, may look at “enhancements” to its long-term capital structure.

Private equity sales to strategic buyers have become a silver lining in an exit environment made difficult in part by a weak IPO market, writes the Wall Street Journal’s Deal Journal. According to Dealogic, U.S. sales to corporate buyers by PE firms are up 46 percent from a year earlier.

CNBC reported that private equity fund Kohlberg Kravis Roberts was in the lead in bidding for Neuberger Berman, beleaguered investment bank Lehman Brothers’ “crown jewel,” its asset management unit.

OTHER DEALS OF THE DAY

** Infosys Technologies, India’s No. 2 software services exporter, said it had agreed to buy UK-based consultancy services firm Axon Group Plc in an all-cash deal valued at 407.1 million pounds. ($753.1 million)

** Norwegian solar industry group Renewable Energy Corporation (REC) plans to build its next silicon materials plant in Bécancour, Quebec in Canada with a goal of starting production in 2012, REC said on Monday. A final investment decision will be made after preliminary engineering is completed, but REC’s investment in the plant is assumed to be at least $1.2 billion, Chief Executive Erik Thorsen said.

** Chip maker Broadcom Corp said it would buy Advanced Micro Devices Inc’s digital television chip business for $192.8 million in cash to enter the market for cheaper television sets. After the deal, Broadcom would be selling chips for television sets with screens of up to 20 inches priced around $200 to $300.

** Q9 Networks Inc, which provides data centers and network management services to other companies, agreed to be bought by private-equity firm Abry Partners in a cash transaction worth about C$361 million ($345 million), the companies said on Monday. Boston-based Abry, through its affiliate CDC Acquisition Corp, will buy all of the outstanding common shares of Q9 for C$17.05 each.

Singapore wealth fund Temasek may have gotten hold of some bad stuff this year when it bought a 9 percent stake in Merrill Lynch. The stock has lost more than half its value since the purchase was announced in late December. But far from swearing off noxious bank assets, the flush Asian fund says it wants more. And why shouldn’t it? It just doubled its full-year profit by selling assets in local power and its national telecoms and airlines companies, as well by cutting a stake in Bank of China, so the toxicity of Merrill’s share price is not making it sick. Financials grew by two percentage points to 40 percent of its portfolio in the year through March and are likely to grow further, with Temasek saying it expects contagion from the credit crisis to spread. That should keep prices down for a while. Temasek said it will not cap its investments in the sector, but it was mum on whether it was thinking of taking on any Lehman exposure.

India’s largest oil producer ONGC has agreed a 1.4 billion pounds ($2.6 billion) takeover of Russia-focused oil explorer Imperial Energy Corp as it works to secure energy to fuel India’s booming economy. Imperial said ONGC’s overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares in a deal that could double state-owned ONGC’s proved and probable reserves. This is less than the 1,290 pence approach Imperial said last month it was discussing with an unnamed bidder, which sources close to the matter identified as ONGC. Investors aren’t wholly convinced though, with the shares trading down more than 1 percent this morning after rising sharply in recent weeks on hopes for a bidding war.

Infosys Technologies agreed to buy British consultancy Axon Group for 407 million pounds ($753 million) as India’s second-biggest software services exporter looks for growth beyond an uncertain U.S. market. The cash deal values Axon at six pounds per share, a 19.4 percent premium over Friday’s close of 5.025 pounds and 33 percent over the average price of the last six months, Infosys CEO Kris Gopalakrishnan said. The stock has risen to 611, and Infosys shares have taken a hit as expectations rise another bid will emerge. Altium Securities said in a note it believed there was room for a counterbid closer to 700 pence.

Other deals of the day:

* Hyundai Heavy Industries, the world’s top shipbuilder, expressed its interest in Daewoo Shipbuilding, joining three other major bidding groups vying for its smaller rival. State-owned Korea Development Bank (KDB) and a government agency have put up for sale their combined 50.4 percent stake in the world’s No. 3 shipbuilder, in a deal estimated to fetch up to $8 billion, more than double Daewoo Shipbuilding’s current market price.

* Bluescope Steel, Australia’s top steel maker, will sell its New Zealand iron sands mining operation for NZ$250 million ($176 million) to Hong Kong’s Cheung Kong Infrastructure Holdings, the company said.

* Pennar Industries said Hyderabad’s JR Realtor Services had acquired 13 million shares, or 10.28 percent of its share capital.

Lufthansa has said it is interested in acquiring a stake in Austrian Airlines. Austrian state holding company OeIAG has invited bidders for its 43-percent stake in the carrier, worth about $223 million.

It’s a small deal, but it’s a big deal.

If Austrian’s board picks Lufthansa, the German carrier will own nearly half of Austria’s main carrier. And that could spur more consolidation — or partnerships at the very least — among other airlines, analysts said.

Lufthansa, affectionately known as Lufthie, is on a spree. In December, the airline bought a 19-percent stake in JetBlue Airways for about $300 million.

Under U.S. law, no foreign airline can own more than 25 percent of a U.S. airline.  By limiting its stake to 19 percent, Lufthansa remains below federal limits on foreign ownership of a domestic airline.

But the passive investment includes a representative on JetBlue’s board and opens up an opportunity for Lufthansa to make a bigger deal down the road.

Also, the “open skies” agreement is sure to increase competition among carriers — in Europe and in the United States. 

As airlines like Lufthansa take stakes in more airlines, and other carriers hold merger talks (British Airways and Iberia are in merger discussions while the two also entered a partnership with American Airlines earlier this month), airlines not in the middle of any talks could find themsleves left out in the cold.

After a New York Post article reported that Hollywood studio MGM had retained investment bank Goldman Sachs to look into a possible sale or capital raising, the studio issued a statement that it was not for sale. MGM, however, may look at “enhancements” to its long-term capital structure.

Private equity sales to strategic buyers have become a silver lining in an exit environment made difficult in part by a weak IPO market, writes the Wall Street Journal’s Deal Journal. According to Dealogic, U.S. sales to corporate buyers by PE firms are up 46 percent from a year earlier.

CNBC reported that private equity fund Kohlberg Kravis Roberts was in the lead in bidding for Neuberger Berman, beleaguered investment bank Lehman Brothers’ “crown jewel,” its asset management unit.

OTHER DEALS OF THE DAY

** Infosys Technologies, India’s No. 2 software services exporter, said it had agreed to buy UK-based consultancy services firm Axon Group Plc in an all-cash deal valued at 407.1 million pounds. ($753.1 million)

** Norwegian solar industry group Renewable Energy Corporation (REC) plans to build its next silicon materials plant in Bécancour, Quebec in Canada with a goal of starting production in 2012, REC said on Monday. A final investment decision will be made after preliminary engineering is completed, but REC’s investment in the plant is assumed to be at least $1.2 billion, Chief Executive Erik Thorsen said.

** Chip maker Broadcom Corp said it would buy Advanced Micro Devices Inc’s digital television chip business for $192.8 million in cash to enter the market for cheaper television sets. After the deal, Broadcom would be selling chips for television sets with screens of up to 20 inches priced around $200 to $300.

** Q9 Networks Inc, which provides data centers and network management services to other companies, agreed to be bought by private-equity firm Abry Partners in a cash transaction worth about C$361 million ($345 million), the companies said on Monday. Boston-based Abry, through its affiliate CDC Acquisition Corp, will buy all of the outstanding common shares of Q9 for C$17.05 each.

Are Microsoft and WPP gearing for an asset swap?

Advertising Age’s Abbey Klaassen is reporting that the two companies — criticized for overpaying for their respective digital advertising acquisitions — have rekindled six-month-old discussions to scratch each others itch.

Microsoft may possibly be seeking to shed its Avenue A/Razorfish, one of the units of aQuantive it purchased last year in a $5.9 billion deal. Avenue A accounted for about 60 percent of aQuantive’s revenue. But getting anywhere close to $3.5 billion would be far-fetched. The division’s market value is close to $800 million, Klaassen calculates.

Enter WPP’ s Martin Sorrell, who has also sought to unload Open AdStream, the ad-serving division of 24/7 Read Media, which WPP purchased for $649 million.

The hitch: Sorrell sees m&a activity in emerging markets like China, not the United States.

Keep an eye on:

• Merrill Lynch may seek to revise its contract with MGM to see if the studio violated any terms by “axing” Paula Wagner as UA’s CEO (NY Post)
• Beijing Olympics were a big ratings success for NBC, but profit estimates of as much as $100 million are too high. (FT)
• Consumer electronics companies want your TV to talk to your fridge. (NYTimes)

(Photo: Reuters / WPP’s Martin Sorrell)