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Stocks down, property down and money down equal deals up
World stock markets have taken a powder this year and, if you strip out miners, big categories like financials and media are showing heavy losses. Which makes such companies easier to buy, of course. Add the rapidly falling price of money (given a good hard shove by US Fed Reserve chairman Ben Bernanke's decision to slash interest rates to 3%) and it's a perfect climate for deals.

Here are just some of them:
Microsoft's mega $44bn bid for Yahoo! looks a shoe-in. There's no way Yahoo! is going to be worth this much to anyone else (certainly not its current shareholders, if the bid is rejected).

Yahoo!'s advisers (who may or not include the mighty Goldman Sachs, Yahoo!'s own news service thinks they will, others think Goldman will switch to Microsoft) are scouring the world for a "white knight" alternative bidder, but why should News Corporation or Time Warner (which has been here once, with its disastrous deal for AOL) or AT&T want it?

They couldn't afford it anyway.

Will it help Microsoft challenge Google in search and online advertising?

Obviously, so Google will probably mount the "Richard Branson Defence" by trying to tie this one up in the courts as long as possible (Microsoft has never been the regulator's best friend).

Unless, of course, Google can effect some form of tie-up with Yahoo!, but that's a regulatory nightmare all by itself. It would slow things down though.

But the deal will surely go through.

Next step after that? Google and Microsoft/Yahoo! buying content businesses to drive advertisers to their own websites.

Pubs and fancy property deals don’t mix
Venerable British pub company Mitchells & Butlers (which owns All Bar One, Harvester and O'Neills) is up for sale after its attempt to split serving drinks from its property estate failed spectacularly and it took a £274m hit on a "hedging" deal, ie an insurance policy its banks insisted on when it borrowed £1bn from them to effect the split.

It's still a mystery why this so-called hedge cost so much, but anyway it's skewered the company (rival pub company Punch Taverns has offered a "nil-premium" merger, which isn't exactly good news for M&B's angry shareholders).

And whose idea was the split? Why none other than our old friend property investor Robbie Tchenguiz.

Robbie wanted to put M&B's pubs into a Real Estate Investment Trust and save tax (ask your accountant), more or less the same kind of wheeze he tried to foist on Sainsbury’s with the help of the Qataris.

I note today that he also looks like losing money on another grocer, Somerfield, which he bought in partnership with Barclays Capital and Apax for £1.8bn a couple of years ago.

This is now up for sale for £2.5bn (Robbie probably needs the money) but retail analysts reckon it's worth £1.4bn at most.

The trouble with property is that, while it is a good deal most of time, when it isn't (like now) it's a screaming disaster.

The property boys and the banks know this, so they take it on the chin and start again.

But any retailer or pub company that thinks they can ride this particular horse and keep their business growing consistently is mad.

Anyway, didn't Robbie realise that most Somerfields don't have car parks?

ITV in the takeover picture
Well, you read it here first (last Wednesday).

Mind you, I don't know how convinced I am by two of the weekend papers' offerings.

The Observer reckons that three private equity groups (Apax, Provident and KKR) are sniffing around, reckoning that a stock that peaked at 160p is a bargain at 73p.

As indeed it is. But then again, with any company, you can always say that private equity companies are sniffing around. Apax, especially, has always been interested in ITV.

Mark Kleinman (late of this parish) says in The Sunday Telegraph that BT, which is trying to break into TV in rather a half-cocked way, is interested in the 17.9% BSkyB stake in ITV.

When share prices are low a wonderful mechanism known variously as the "share swoop" or "dawn raid" comes into being.

Essentially this means sending your broker out before breakfast to buy as many shares in your target as he or she can.

This is how BSkyB gained its stake in ITV last year.

It's gone out of fashion recently, as more companies have tried to cash in on their lofty share prices by using their paper to do deals. Dawn raids need good old-fashioned cash (or at least borrowings).

What's the betting that there's a second dawn raid on ITV sometime soon?

Marcomms group Creston is a 'hidden gem'.
We don't write enough about small companies, so let's applaud Don Elgie's marketing communications company Creston for coming top in accountant Grant Thornton's "hidden gems" league table.

Essentially this ranks companies according to a combo of cash flow and share price.

So Creston comes out top in 2007 because its share price doesn't reflect the healthy cash flow the £33m company enjoys.

Elgie is far too seasoned an operator to be carried away by this, and it's unlikely that the City will re-rate his shares at a time when marketing budgets are expected to fall.

It probably won't even get the likes of WPP's Sir Martin Sorrell dusting off his cheque book. One reason Grant Thornton reckons Creston is solid is that it's not dependent on one account or discipline.

But most big ad deals these days are done to take over one or a few big clients.

Anyway, it's nice to be top. Mind you, another company in the list is gamer SCi Entertainment at 41 (another of Robbie Tchenguiz's investments).

I thought that was going bust?

China puts the miners in their place
Through a dawn raid, no less. Last Friday Chinese government-owned aluminium firm Chinalco spent £7bn buying a 12% stake in miner Rio Tinto, the subject of a takeover bid from Aussie giant BHP.

A tie-up between BHP and Rio Tinto would be bad news for the Chinese, given their voracious appetite for metals of all description.

BHP has to announce its final terms for the mooted takeover on Wednesday, and the price has just gone up, of course.

Analysts reckon the Chinese won't make a full bid for Rio Tinto (or for other big miner Xstrata, which the Brazilian company Vale is trying to buy).

But why shouldn't they? They've got the money and couldn't care less if the Australian government (thought not to fancy a Chinese takeover of Australia's biggest company) kicks the whole merger into the long grass.

Either way they win.

Olivant pulls out of Rock race - 7pm update
Former Abbey boss Luqman Arnold's Olivant consortium (the shareholders' favourite option) has pulled out of the Northern Rock race, claiming the deal on offer now doesn't meet its "investment criteria", leaving the government with just two options.

The company's existing management has allegedly lined up £400m in equity from existing shareholders, giving it a chance, while Virgin is still in there and spinning away, releasing 'research' over the weekend claiming that most people think Northern Rock is a shot brand.

But that still doesn't mean they won't put their money into it if it's offering better rates (which it will need to do, whoever owns it, if it's going to match deposits to mortgages).

Anyway, despite scepticism from this quarter, Olivant's last-minute withdrawal makes Sir Richard Branson's Virgin bid the clear favourite.

He's got staying power anyway.

Stephen Foster is a former news editor of ±±¾©Èü³µpk10, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog and Politics of the Media for Brand Republic.