For the past year, silver linings have been in short supply. Even as financial markets claw their way back up, the wealth lost has been neither forgotten nor completely recovered. In the private equity sector, the good news is that, frankly, the situation could have been worse. Though returns plunged, the asset class still outperformed the public equity markets.

A new analysis from alternative investment research firm Preqin puts the private equity industry's return at -30% for the 12 months ending March 31, 2009, a period that encompasses the bulk of the lows without the benefit of the upswing that followed. For the same year-long period, the S&P 500's return was -38.1%, with the MSCI Europe's at -49.9%, and the MSCI Emerging Markets' return at -47.1%.

For the private equity industry, 2009 is looking a lot like 2003. After yet another tough quarter, the amount of new funds raised plummeted, reaching levels not seen in six years, according to documents provided by London-based private equity research firm Preqin.

Fewer funds are closing, and many of those that are closing are doing so short of their initial targets. There are indicators, however, that the situation could turn around by the end of 2009 or early in 2010.

Private equity funds raised only $38 billion in the third quarter of 2009. This is the lowest worldwide total since the fourth quarter of 2003. From the second quarter of 2008's level of $84 billion, this is a decline of 45%, and it is a mere 18% of the record $208 billion that global private equity funds raised in the second quarter of 2007.

As the FDIC fund dwindles to its lowest point since 1992, foreign banks may step up to save the day. Fewer U.S. banks have the reserves to buy failed banks, so the FDIC is looking at changing the rules to allow private investment groups to buy banks. It's also turning to foreign banks, especially those that already have a presence in the United States.

The FDIC bank rescue fund had a balance of $13 billion on March 31. Since that time three major bank failures -- BankUnited Financial Corp. in May and Colonial BancGroup and Guaranty Financial Group in August -- cost the fund $10.7 billion. Another 53 banks also failed in the meantime, with an estimated total cost for all bank failures since March 31 of $16 billion. Even at $13.2 billion, the fund was at its lowest point since 1992, when it was $178.4 million. Since March, banks have paid fees so the fund isn't insolvent, but it may be close.

Those who were banking on Electronic Arts Inc. doing whatever it took to get a deal with Take-Two Interactive Software Inc. are in pain Monday after negotiations between the two game makers ended over the weekend.

Analysts, meanwhile, were left trying to figure out why the deal didn't happen, and what's next for Take-Two. There weren't too many answers to the first question, other than the pretty obvious conclusion that Take-Two wanted more money than EA was willing to pay, but plenty of guesses about the second.

Wedbush Morgan Securities analyst Michael Pachter in a research note Monday said that despite strong third-quarter results, the company's balance sheet foreshadows a "reversal of fortune" in 2009. Specifically, the analyst said Take-Two's cash reserves are significantly lower than its peers, as a percentage of its trailing six months of publishing revenues.

Continue reading at TechConfidential.com.

Waste Management, Inc. (NYSE:WMI) is switching around the merger game in the garbage and trash collection sector. The company has announced today that it has made a proposal to Republic Services, Inc.(NYSE: RSG) to acquire Republic for $34.00 per common share in cash.

The company said that its proposal represents a premium of approximately 22% over the closing price of Republic stock from before the offer was submitted. Waste management believes that its all-cash proposal offers a better value to Republic stockholders than the recently announced Republic-Allied Waste Industries, Inc. (NYSE: AW) transaction.

The company said its board is committed to maintaining an investment grade status and is committed to continuing its annual dividend of $1.08 per share.

Waste Management noted that the Republic-Allied merger agreement expressly contemplates alternative proposals from third parties and defines a process for Republic to respond to those proposals.

The company believes that a transaction with Republic would close early in 2009. Waste Management also noted that it believes all of the financing needed to complete the transaction will be available on satisfactory terms believes it will maintain its investment grade status on a combined basis.

You could imagine that this would definitely run into antitrust issues and would definitely require certain divestitures.

With the markets in a swoon, marquee assets are on sale in the US. And with the drop in the dollar, the valuations look even more compelling. Something else: the surge in commodities, especially in oil, is bulging the assets in mega sovereign wealth funds.

Even US icons are under attack, such as Anheuser-Busch Companies Inc. (NYSE: BUD), which is fending off a hostile takeover from Belgium's InBev.

True, there is some good news. For example, our domestic companies will have an edge with exports (it seems that this has saved us from a recession -- at least so far). But, alas, it is little consolation.

Perhaps the most effective way to boost the value of the dollar is to increase interest rates. However, this will be a tough thing to do in light of the upcoming election, the housing sump and continued economic weakness.

In other words, US assets should remain cheap. And foreign buyers can't ignore this. So, it's a good bet that we'll see more and more dealmaking from overseas.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

APP Pharmaceuticals Inc. (NASDAQ: APPX) is one of the more active pre-market stocks today. The surge in trading this morning is the result of an overseas buyout for some $23.00 cash per share, although shares are trading north of $23.00 because there are earn-out clauses could generate further premiums in the future.

German health-care giant Fresenius has agreed to acquire APP for $23.00 per share in a cash acquisition, and there is an earn-out option that would enable holders to receive up to an additional $6.00 per share if APP's financial results meet certain targets. The term may go out until 2011 for the extra cash, so this won't occur overnight.

This gives an implied merger price of about $3.7 billion up to $4.6 billion. So depending upon the earn-out and performance clause, investors will get either a 29% premium, or they will receive a buyout that could be as mush as 63% over the life of that term.

Continue reading at BioHealthInvestor.com for on the fly analysis, direction, and ramifications. You can also see how the unusual volume may continue after seeing the data at VSInvestor.com for the volume spike effect.

Almost everyone thought of the Penn National Gaming Inc. (NASDAQ: PENN) private equity LBO merger as dead money for quite some time. It only officially became a dead merger this morning. This was the last of the big multi-billion deals still officially on the books that was put together back before we had a full blown credit crunch.

PNG Acquisition Company Inc. was the buyout entity, which was indirectly owned by certain funds managed by affiliates of Fortress Investment Group LLC (NYSE: FIG) and Centerbridge Partners, L.P.

The buyout price of $67.00 per share was older than Methusela. Since January, this stock slid steadily from over $60.00 down to under $30.00. The deal was a known to be dead by everyone. But there is actually a silver lining here for the company. Penn National will get $1.475 Billion in cash out of this.

Affiliates of Fortress, affiliates of Centerbridge, affiliates of Wachovia, and affiliates of Deutsche Bank will all be holders of those notes. To top it off, Fortress Investment Group's Chairman & CEO, Wesley Edens, will join the Penn National Gaming Board of Directors.

Keep reading for on the fly analysis, guidance, and ramifications at 247wallst.com.

There is a rather interesting deal out there that can be viewed as a glass half-full or glass half-empty depending on whether or not you are from the private equity side or from a public company.

Fiserv Inc. (NASDAQ: FISV) has announced a rather interesting move this morning. It is selling a majority interest in its insurance business operations for some $510 million in equity and debt to Trident IV, a private equity fund managed by Stone Point Capital LLC.

The company has announced that it will turn around and repurchase up to 10 million shares of common stock in a repurchase program.

You can continue reading for the full details, on the fly analysis, and ramifications at 247Wallst.com.

It looks like we have another small information technology merger taking place this morning. This is a US company acquiring an Irish company.

Progress Software Corporation (NASDAQ: PRGS) has entered into a definitive agreement to acquire IONA Technologies plc (NASDAQ: IONA) in a cash buyout of $162 million and approximately $106 million net of cash and marketable securities reported on March 31, 2008. This will bring a cash buyout price of $4.05 per share for IONA holders.

The offer price per share is approximately 16% over the average price for IONA shares over the six months prior to the offer period announced by IONA on February 8, 2008. Unfortunately, the 52-week trading range is $2.01 to $6.28.

So far, IONA shares are trading up 9.4% at $3.94 and Progress shares are up less than 1% at $25.46 in the first ten minutes of trading.

IONA Technologies' board of directors unanimously approved the merger and each IONA Technologies director has entered into an agreement to vote in favor of the transaction. The merger is subject to regulatory approval in teh US and in Ireland and is also subject to IONA shareholder approval.

Progress Software is a global supplier of application infrastructure software used to develop, deploy, integrate and manage business applications. IONA Tech is an established supplier of software integration technology. The companies have both signed a definitive agreement to further the merger. IONA is based in Dublin, Ireland, so it looks like we have yet another cross-border tech and IT merger.

Huntsman Corp. (NYSE: HUN) is seeing the value of its stock destroyed in after-hours trading. This was one of those pending mergers that was old enough that many had forgotten it was even on the docket. Hexion Specialty Chemicals has announced that it has filed suit in Delaware to exit its contractual obligations to acquire the company.

The Hexion-led filed to terminate its proposed $10.6 Billion acquisition of Huntsman Corp. Hexion has said in this suit filed that it believes that the capital structure agreed to by both Huntsman and by Hexion for the combined company is no longer viable.

The reasons noted are because of Huntsman's increased net debt and its lower than expected earnings. Hexion notes that both companies are individually solvent but it believes that the merger's capital structure previously agreed to would render the combined company insolvent.

Keep reading at 247WallSt.com for the rest of the details and analysis.

Early this year, The Blackstone Group LP (NYSE: BX) agreed to purchase GSO Capital Partners, a hedge fund that focuses on leveraged finance, for a cool $930 million. Stephen A. Schwarzman, Blackstone's CEO, said that the deal would create "one of the largest credit platforms in the alternative asset management business." Yes, it's an attractive space, especially in light of the credit crunch.

Moreover, Blackstone isn't wasting time in leveraging the GSO platform. According to a report in Bloomberg, it looks like it is raising a new fund that is focused on distressed debt.

True, there hasn't been a surge in defaults and bankruptcies, but such things usually have lag times, and if the economy remains sluggish, there are likely to be many distressed opportunities.

However, the distressed investment market is getting crowded. Some of the recent players include the Carlyle Group and Oaktree Capital Management. In fact, Monarch Alternative Capital and Cerberus Capital Management LP are in the market raising their own distressed funds.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Leave it to private equity to try to bring back Michael Jackson.

The Wall Street Journal recently reported that "Colony Capital, which owns the Las Vegas Hilton and is a major shareholder in closely held Station Casinos, is in discussions with Mr. Jackson to get him back onstage and in the spotlight via a long-term stand in Las Vegas."

Colony Capital may just have the leverage to get something done with Mr. Jackson: he owes them $25 million after the firm acquired the debt from Fortress Investment Group.

The plan is to try to revive Jackson's career with a stint in Las Vegas and, eventually, build a Thriller-themed hotel-casino there. I'm not so sure. Las Vegas has resuscitated -- or at least prolonged -- the careers of a lot of entertainers, but it's hard to think of anyone who carries as much baggage as Michael Jackson.

Similarly, a private equity firm might be able to turn around a struggling brand but, to my knowledge, the industry has never attempted to work its magic on a brand that a large percentage of Americans believe has molested children (with the possible exception of Chrysler). And legal system be darned, that's what many people associate him with.

Landry's Restaurants, Inc. (NYSE: LNY) has announced that it has entered into a definitive agreement with Fertitta Holdings, Inc.

Fertitta has agreed to acquire all outstanding common stock for $21.00 per share in cash. This represents a premium of approximately 37% over the closing share price of the company's common stock on April 3, 2008. This was the last day before disclosure of the revised offer made by Mr. Fertitta to acquire the company. The total value of the transaction is approximately $1.3 billion, which includes approximately $885 million of debt.

Fertitta is a newly formed entity wholly owned by the company's Chairman, President, CEO and original founder, Tilman J. Fertitta. Mr. Fertitta beneficially owns approximately 39% of the Company's outstanding shares of common stock.

Continue reading the implications and analysis at 247WallSt.com.

A fresh report out of Reuters is saying that Time Warner Inc. (NYSE: TWX) has withdrawn from the bidding process to acquire The Weather Channel due to price. The deadlines on this were supposed to be noon today.

Recent reports put Landmark Communications, the owner of the Weather Channel, was in direct talks with Time Warner and a rival group made up of General Electric Co. (NYSE: GE) NBC Universal, The Blackstone Group, L.P. (NYSE: BX) and Bain Capital.

Because this is a private transaction and because this is such a large deal for the ultimate buyer(s) and sellers, this one has been a hard one to follow with any credible or dead set numbers and terms.

This is an ongoing and developing story with an outcome that is not yet known. Stay tuned.