More bad news came streaming into the M&A and capital markets worldwide in November, according to Thomson Reuters’ snapshot of the month.

IPOs showed fleeting signs of life, follow-on offerings by capital-starved banks remained robust and investment grade bond issues remained strong, but M&A activity reached new lows worldwide and high yield corporate bonds fell to nothing.

Here is a closer look at what November had in store for the world of finance:

CAPITAL MARKETS

SIGNS OF LIFE:
After several months in comatose state, the IPO market showed brief flickers of life, with both Europe and the United States seeing their first IPOs since the summer. Polish energy company ENEA SA raised $US 739 million, while in the U.S. online university Grand Canyon Education Inc broke a 15-wk snap with a $126 million IPO. But the burst of activity was short-lived. There are no further IPOs scheduled for pricing in the U.S. at this time.

Continuing a trend since the beginning of the year, financial companies dominated the market for follow-ons, and have raised $223 billion so far this year, or half the volume globally. Mega issues by Wells Fargo ($12.6 billion) and Banco Santander $9.3 billion) helped financials dominate follow-ons in November, with a 70 percent share.

Investment grade bonds issues by financials, energy and consumer companies doubled in November over October, which had been the slowest month of the year, and Euro-denominated investment grade corporate bonds reached $55.8 billion, its highest level since August.

MORE PAIN
Convertible bonds hit a 10 year low, reaching only $1.7 billion, while no high yield corporate bonds were issued in November, the first time that has happened since March 1991. So far in the fourth quarter, the only high yield corporate bond was issued by troubled casino operator MGM Mirage, for $699 million.

Global syndicated loans were down again in November, totaling $88.8 billion, the lowest level since January 2003.

MERGERS & ACQUISITIONS:

All was sleepy on the M&A front as well. The European Union and the United States saw their lowest M&A levels year-to-date since 2005, while Asia was at is lowest levels since 2006. In the United States, 491 acquisitions totaled $22 billion, the lowest number of deals since September 2001.

And the aborted takeover of Rio Tinto by BHP brought canceled M&A activity to $327 billion in the fourth quarter, not far below the $413 billion worth of deals that managed to be completed.

At least the financial crisis has turned governments into M&A machines. Fed by 51 acquisitions worldwide of equity stakes in financials totaling $24 billion in November, government bailouts have now reached $181 billion so far this year. In fact the U.S. Treasury’s purchase of warrants for shares in Citibank worth $2.7 billion ranked as the ninth biggest M&A deal worldwide in November.

Microsoft’s videogame chief Shane Kim came by our New York office this morning for the Reuters Media Summit and shared his thoughts on XBox 360 sales (”cautiously optimistic”) and the outlook for the gaming industry amid the economic doom-and-gloom (”Who knows, maybe flat performance will be considered a remarkable achievement”).

He also gazed into his crystal ball and served up some insights on the trends shaping the gaming business.

Consolidation is going to continue, he thinks, especially among the smaller videogame publishers as they search for hit games while keeping costs in check.

“There are a number of mid-tier publishers behind the Electronic Arts and Ubisofts and Activisions of the world who are struggling.”

Another exciting trend for Kim is the return to videogame content developed by small creative teams, which he thinks could reduce the industry’s dependence on sequels of hit games.

“That would be a good thing… because one of the challenges the industry has had, in my opinion, over the last five to 10 years is a growing reliance on sequels and licensed properties as opposed to those new creative hits. If we can find those nuggets that start smaller and can grow into big hits, that’s a great thing.”

He did wonder how smaller creative shops could find funding for their pitches, given that dollars could be hard to come by these days. But at the same time, it’s an opportunity for bigger publishers, he said, since nothing rocks the gaming world like a hit game.

(Photo: Reuters)

EDF’s unsolicited bid for a 50 percent share of Constellation Energy’s nuclear business could have a wider effect than the French company intended, according to Wachovia analyst Samuel Brothwell.

Brothwell said the bid could also effect other power companies that could be up for sale, in particular NRG Energy and Reliant Energy. The bid “offers another data point highlighting the extremely low levels at which the market is currently valuing their plants,” he wrote in a research note on Wednesday.

Brothwell estimated that NRG’s power assets were being valued at about $550 per kilowatt (kW) and Reliant’s were trading at about $260 per kW.  That compares with the $862 per kilowatt EDF used to value Constellations non-nuclear assets.

Moreover, Brothwell speculated that if MidAmerican fails in its bid to buy Constellation, it could use its extra cash to go after another power company.

After being roundly criticized by politicians and the public alike for flying private jets to ask for public money, the CEOs of Detroit’s Big Three, GM, Chrysler and Ford, have decided instead to drive to Washington this week for their latest round of begging for a $34 billion bailout. One, Ford’s Mulally, was reportedly already on the road on Tuesday afternoon but it wasn’t clear if he would be overnighting at an Econo Lodge, Motel 6 or in the back seat.

Apparently, optics in the current economic crisis dictate that their time would be better spent on a 10-hour, 520-mile drive from the Motor City to the nation’s capital than on a one-hour flight.

That’s a lot of time on Interstate 70 for executives who are used to jetting from one private terminal to another. But perhaps the besieged CEOs will welcome the chance to take a road trip — a chance to put the pedal to the metal and crank up — or even rewrite — some tunes.

One can imagine GM chief executive Rick Wagoner penning his own version of “I Drove All Night,” a song recorded by artists that include Roy Orbison, Cyndi Lauper and Celine Dion. He could dedicate it to New York Democrat Gary Ackerman who asked the CEOs last month, “Couldn’t you have downgraded to first class or something, or jet-pooled or something to get here?”

I Drove All Night (written by Billy Steinberg and Tom Kelly)

I had to escape, Detroit was sticky and cruel
Maybe I should have flown first class
But I was afraid of being mocked by you
I was dreaming while I drove
Of making fuel efficient cars, uh huh, uh huh, yeah

Could taste your sweet bailout, your vault open wide
This dream of cheap cash is just burning me up inside

I drove all night to get to you
Is that alright?
I drove all night, nixed a hotel room
Won’t carpool with Nardelli, or Mulally too
Is that alright? I drove all night.

Other suggestions for the CEOs’ mix tape: AC/DC’s “Highway to Hell”, Ray Charles’ “Hit the Road Jack,” Tom Cochrane’s “Life is a Highway,” Golden Earring’s “Radar Love,” and the Cars’ “Drive.”

It is said that all that glitters is not gold. Keep that in mind when considering the bidding war heating up the nuclear power business. France’s EDF has offered $6.5 billion for half of Constellation Energy Group’s nuclear business and some other assets, trumping Warren Buffett’s bid of $4.7 billion for all of Constellation.
 
If plummeting demand for everything from new cars to tin foil could fell BHP’s monster bid for Rio Tinto, why wouldn’t it weigh on demand for energy? While nuclear power has regained some favor as a cheap, relatively clean alternative to nasty fossil fuels, is it really safe to expect consumers to ramp up electric heat this winter, and air conditioning next summer, when they are worried about losing their jobs?
 
And today brings more evidence that the lengthy, torturous bid process BHP endured before walking away from Rio Tinto may have saved it from dealing with a disastrous downturn in demand. Freeport McMoran, which bought Phelps Dodge for $26 billion two years ago, slashed its dividend this morning after raising it only four months ago.  
 
Constellation shares rose nearly 20 percent to over $30 this morning, but that is still well below the value of the EDF bid — $52 a share. Perhaps investors aren’t quite so warm and fuzzy toward nukes after all.

* Australia said it is open to a $5.9 billion merger between Qantas Airways and British Airways as long as it’s not a takeover, sending the Australian carrier’s shares up nearly 10 percent.

* A Japanese unit of Prudential Financial plans to bid for two Japanese life insurers put up for sale by American International Group, people familiar with the matter said.

* Investment funds of Wall Street banks Goldman Sachs and Morgan Stanley and private equity giant Bain Capital plan to invest a combined at least $30 million into a Chinese movie distributor soon, top boss of the distributor Poly Bona told Reuters.

* The Irish government said it would consider Ryanair’s new offer to buy rival airline Aer Lingus, in which the state holds a 25 percent stake, but it will be careful to preserve competition.

* Debt-laden Telecom Italia, Europe’s fifth-biggest telecoms provider, will shed assets worth up to $3.82 billion and cut another 5 percent of its workforce in a bid to slash borrowings and trim costs amid a weak economy.

* Two investors in Irish Continental Group said they were in talks about a possible offer for the company, owner of Irish Ferries, reopening a bidding war between competing shareholders with blocking stakes.

* Georgia has sold the remaining 49 percent of its Black Sea port of Poti to RAK Investment Authority of the United Arab Emirates for $65 million, its deputy minister Vakhtang Lezhava told Reuters.

* Government-owned Nakheel Properties, developer of Dubai’s palm-shaped islands, is not in discussions over the sale of company and has no immediate plans to cut more jobs, the chief executive told Reuters.

* Swedish oil and gas group Lundin Petroleum has agreed to sell its 9.2 percent stake in Revus Energy to Germany’s Wintershall, helping to clear the way for Wintershall’s takeover of Revus.

(Reuters photo: Vincent Kessler)