Bankers, telecom company executives and private equity types echoed these views at a Feb 9 event on deal-making in telecoms and media in 2010, organized by the Argyle Executive Forum. Yes, the U.S. wireless sector will likely see some deals born of necessity, but that doesn’t spell the return of M&A to the telecommunications sector as a whole, panelists said at the half-day event in New York. Rural telecoms companies could also see more consolidation, some of the panelists said, as these providers merge to cut costs and keep growing even as they lose traditional phone users.

A combination of Leap Wireless and MetroPCS makes “obvious sense,” said Prem Parameswaran, who heads Deutsche Bank’s telecoms group for the Americas.  Because Leap and MetroPCS operate in certain markets that cable operators provide their services in, a cable company like Comcast could potentially be interested too, he suggested. However, Parameswaran didn’t get around to explaining how this might sit with Comcast’s current investment in emerging provider Clearwire.

Parameswaran said that the financing markets have opened up again after the credit crisis, and “a byproduct of financing is M&A,” which means more deal-making in the offing, although he questioned how sustainable current financing levels are.

Julie Richardson, a managing director at Providence Equity Partners, said: “2010 won’t be a banner year for M&A. There is still a lot of uncertainty out there.” But she did list the wireless sector as likely to be the most active. “It is going to be a really tough business in voice mobile telephony… those who don’t have differentiated positions will have to ask themselves, ‘How do I make myself stronger?’.”

Even in such a competitive market, Davis Terry, a former UBS banker and founding partner of Tap Advisors, saw little possibility of M&A activity. “The four big guys (AT&T, Verizon, Sprint and T-Mobile)… (it’s) unclear whether any of them could do anything with each other… the smaller guys, with the exception of Leap and Metro, (there are) not many of them left,” he said. “In the U.S., it’s going to be lean for a while, a few deals here and there but nothing like the old days.”

International markets offer some hope, at least for private equity. Recently, a group led by Quadrangle Capital, the buyout firm co-founded by Steven Rattner, invested $300 million in India’s Tower Vision, a manager of wireless towers. In general, mobile infrastructure investments in developing countries is an attractive area for private equity, the panelists said.

“When you look at China and India, that will be the predominant (area) for us,” Providence’s Richardson said. Terry also agreed that Asian countries top the list of preferred international destinations, but added that the growth of Africa’s wireless markets also present attractive investment opportunities.

Of course, it all depends on whether the credit markets hold up. “Private equity will turn somewhat on the strength of credit markets,” said Andrew Frey, managing principal at Quadrangle. “If that persists you’ll likely see a pick up in private equity activity.”

(Additional reporting by Sinead Carew)

“A lot of balance sheets in corporate America got clean and lean and I think you’ll see a good deal of M&A activity over the next couple of years,” said Apollo Management’s founder Leon Black.

Here are some other takes from Berlin:

Apollo predicts ‘bonanza’ in commercial property (FT)

Super Return: Black Sees Better Days Ahead (NYT)

For Private Equity, a Time for Wary Optimism (NYT)

Investors demand that buyout firms disclose more (Reuters)

Other topics:

‘Blind Pools’ Falter as Ziman, Callahan Plan Comeback (Bloomberg)

China builds stakes in Canadian mining companies (The Globe and Mail)

What Those CIC Stakeholding Disclosures Say About Its Strategy (WSJ)

Delta had been courting the Japanese carrier for months with an offer of $1 billion in financial aid. A nice offer, but hardly enough to put a dent in JAL’s $25 billion debt load. Of more value was access to Delta’s larger route network, which could have saved it some costs.

JAL’s new management team said switching alliances risked derailing its efforts to revive itself in three years with the help of a government-backed fund. Another big concern may have been one of antitrust. American had said that defecting to SkyTeam could drain JAL of about $500 million in revenues during a transition period of 18-24 months, but was also arguing that a Delta and JAL tie-up would stifle competition by creating a dominant player on transpacific routes.

With all of its problems, JAL can perhaps be forgiven for not wanting to keep that “dominant player” tag.

British pay-TV group BSkyB sold a 10.4 percent stake in commercial broadcaster ITV, finally bringing an end to a long-running legal battle. BskyB had been ordered to cut its stake to below 7.5 percent in 2008. Since then, it has been through a series of appeals, all of which it lost.

For these stories, and all other Reuters news on deals, click here.

And for a selection of news in rival media:

The government of Ghana has blocked the estimated $4 billion sale of a stake in its Jubilee oil field, foiling months of talks between potential buyer Exxon Mobil Corp and the stake’s owner, Kosmos Energy LLC, the Wall Street Journal says.

South Korea’s Lotte Group has agreed to buy GS Retail’s department store and discount store operations in a deal estimated at as much as 1.4 trillion won ($1.20 billion), according to the Maeil Business Newspaper.

U.S. hedge fund D.E. Shaw has set up a team to look at buying distressed-asset portfolios held by rival hedge fund firms, the Financial Times says.

The tax is likely to be a hot issue at one of the private equity industry’s biggest conferences, Super Return International, which starts on Tuesday in Berlin and is attracting heavy hitters from major American buyout firms such as Carlyle and Apollo.

More PE news:

• Long list of buyout firms pursuing European deals (Reuters)
• Local buy-out firms defy US groups in China (FT)
• Private equity bids for KDG: sources (Reuters)
• Bain raises $525 million for new venture fund (Reuters)
• Denmark’s ATP to up hedge funds, private equity: CEO (Reuters)

Google threatened to quit China only a few weeks ago and the internet search giant is finalizing a deal that will let the U.S. National Security Agency (NSA) help it investigate the corporate espionage attack it thinks originated in the People’s Republic. China has warned the U.S. not to make politics out of the Google issue, but it may be too far into the saber-jangling season for that, with Barack Obama having announced fresh U.S. weapons sales to Taiwan in his State of the Union address.

Though Google’s stake in the Bus Online deal is said to be small, even smaller than the tiny investment this will be for media giant Disney, it could just be big enough to cause headaches for Mickey and Co.

Bus Online is leading China’s media and advertising charge into this busy area of mass transit. It had revenue of only about 314.5 million yuan ($46.07 million) in 2009, but is the exclusive partner of state broadcaster CCTV and the official Xinhua news agency media content in advertising on buses. Sources tell us that senior Disney executives are set to fly to Beijing to meet media regulators to discuss Mickey’s long-term development plan in China, including the Bus Online deal.

The consortium planned to buy a stake of between 30 and 40 percent in Bus Online for more than $100 million via a purchase of old and new shares to be issued by the company in private placements. In November, Disney made a breakthrough deal to build one of its signature theme parks in Shanghai, marking a major advance for Western media and entertainment companies seeking to crack the tough Chinese market. With Google aboard, though, will the wheels of that bus come to a political stop?

Today Christopher Dodd, the Democratic chairman of the Senate Banking Committee, said he has reached an impasse with his Republican counterpart and will begin drafting new legislation to be considered later this month.

Congress is trying to construct an overhaul of financial regulations in the wake of the market meltdown that led to multi-billion dollar taxpayer bailouts of individual financial firms and the collapse of others, including Lehman Brothers.

Proposals include creating a consumer agency to police financial products, forming a systemic risk regulator and drafting stricter capital and liquidity requirements for financial firms.

Some background from the Web:

• Federal Reserve Board Governor Kevin Warsh’s opinion piece in the FT: Focus on ways for banks to fail safely
• Bank reform faces hurdle on Volcker rule (Reuters)
• The Volcker rule’s loopholes (Reuters)
• The regulatory landscape for private equity (NYT)
• Obama bid to rein in banks meets Senate resistance (Reuters)
• Banks read tea leaves in ‘Volcker rule’ fight (Bank Investment Consultant)
• Volcker and reform defeated (WSJ)

The company launched an unsolicited $5.1-billion cash bid to buy rival Airgas in a move to create the largest industrial gas company in North America. In the past four months, Air Products had made two written offers but they were rejected by the Airgas board.

Unsolicited approaches and hostile M&A tend to increase coming out of a recession. As the economy begins to stabilize, stronger players feeling more secure in their own future seize on the chance to buy rivals at still-depressed prices. In the past few months, such deals include Kraft’s bid for Cadbury and the battle involving Agrium, CF and Terra.

Air Products said it offered a 38 percent premium over Airgas’s closing price Thursday and an 18 percent over Airgas’s 52-week high. But the $60 per share offer is around the low $60s Airgas touched in June of 2008.

Fond memories of a company’s past glory and expectations about profitability are often reasons why boards are so reluctant to sell out in their new, more depressing realities, and why these unsolicited approaches tend to turn hostile.

Airgas, which has a sales and distribution network that sells canisters of specialty gases to industrial and medical facilities, also seems to be using the classic defence against unsolicited bids — appealing to its shareholders with its history as a higher return, faster growing company.

Airgas stock price appreciated 80 percent over the last five years and 415 percent over the last 10 years, compared to just 40 percent and 145 percent for Air Products` shares over the same periods, it pointed out in a letter its board sent to Air Products after the last approach.

It said it would review the latest proposal and advised shareholders to not take any action.

It was a shareholder-friendly idea of RZB to inject 600 million euros of this capital by way of non-voting “participation rights” which didn’t dilute shareholders at a time when the share price was battered because of lingering concerns eastern Europe was facing a financial meltdown. (The remaining 650 million euros are a straight Tier 1 hybrid.) But the flip side was that those participation rights carry a steep 10 percent coupon that goes out after the net profit line, i.e. is after taxes.

In a research note initiating his coverage of Raiffeisen, Thormann says that using a 10-percent share issue (which, as it happens, works out as roughly 600 million euros at current prices) to repay the participation rights would therefore actually increase earnings per share:

“We have not factored in any capital increase but could easily imagine a 10% capital increase in 2010 in which Raiffeisen International would use the proceeds not to boost its Tier 1 ratio but to pay back the EUR600m Genussrechte (participation rights). This move, which would also effectively strengthen the capital position of RZB Group, would not imply a 10% EPS dilution. Rather it would be 10% EPS accretive in 2010e and just 1% EPS dilutive in 2011e as the 10% after-tax coupon on the EUR600m Genussrechte would fall away.”

Deutsche Telekom is considering an initial public offering or spinoff of its U.S. wireless service T-Mobile USA, the Wall Street Journal reports, citing people familiar with the matter. T-Mobile USA could have an equity value of around $20 billion, the Journal says.

There’s plenty of other M&A and corporate finance news reported by Reuters and other media on Friday. Highlights include:

Mongolia’s government cancels the auction of an estimated $2 billion stake in one of the world’s largest untapped coal deposits, ending the hopes of global mining giants eager for a slice of the project, sources tell Reuters.

Thanachart Bank, 49 percent owned by Canada’s Scotiabank, has offered $984 million to buy 48 percent of  Thailand’s seventh-ranked lender, sources tell Reuters, muscling ahead of an offer by HSBC.

U.S. private equity firm Blackstone and buyout firm Resolution have joined National Australia Bank in a possible bid for more than 300 branches of Royal Bank of Scotland, the Financial Times says.

Private equity firm Cinven is teaming up with retail executive Rob Templeman to consider a $794 million bid for UK furniture retailer DFS, the Daily Telegraph reports.

Abu Dhabi’s sovereign wealth fund is to buy a 15 percent stake in London’s Gatwick Airport for $200 million as
the airport’s new owner aims to bring in additional investors, the Times newspaper reports.