Online radio network Pandora has raised $35 million in new VC funding, according to multiple sources familiar with the deal.

No word yet on who’s leading the round, or which existing shareholders re-upped. Pandora had previously raised around $29 million, from firms like Crosslink Capital, DBL Investors, Hearst Corp., Labrador Ventures, Selby Venture Partners and WaldenVC.

[Update: The company has emailed to say Greylock is leading the round, with partner David Sze joining the Pandora board of directors. Pandora declined to comment on the round's size or valuation]

What’s particularly interesting here is that the new financing was signed while Pandora’s very existence was in jeopardy. The company had been operating under a royalty structure that caused it to shell out nearly 70% of its revenue to record labels, and which was expected to increase by nearly 33% next year. Pandora founder Tim Westergren referred to it as a “crisis,” and TechCrunch wrote that the company may need to be “sacrificed before artists and labels to realize just how absurd their position is.”

All of that changed earlier this week, when Pandora and other webcasters reached a new agreement with the recording industry. Under terms of the new deal, large players like Pandora will pay out either 25% of revenue or a per song fee that will increase each year (whichever is higher). Still sounds onerous compared to terrestrial radio – which pays zilch – but is still considered a big win for Pandora.

Pandora also will begin charging a nominal fee to those who use its service more than 40 hours per month.

I’ve got to assume that investors believed this revised royalty agreement was a done deal, although my best bet is that some sort of contingencies were attached to the $35 million (like if the royalty thing fell through, so did the financing). Otherwise, it would have been a hell of a risk to take…

Hopefully we’ll learn more soon. I’ve put in calls to Westergren and Pandora CEO Joe Kennedy, but am not terribly hopeful that I’ll hear back on a Friday afternoon…

This week's Thomson Reuters Investment Banking Scorecard shows bankruptcy-related M&A at a five year high.

There were five bankruptcy-related M&A deals announced during the week, including the acquisition of venture-backed public company Nanogen by French investment holding company Financiere Elitech for $25.7 million. 

So far this year there have been 173 bankruptcy-related deals, the highest level since the same period of 2004 when there were 202.

During 2009 the most bankruptcy-related M&A deals have occurred in the industrials sector with 23 percent, followed by the media and entertainment sector with 16 percent. 

In terms of geography, U.S. targets represent 83 deals or 48 percent of the total of bankruptcy M&A.

This is hardly surprising given the speed with which some of the biggest bankruptcies have happened in the U.S. -- with a little help from section 363 easing rapid asset sales at GM and Chrysler.

The rest of the world probably has some catching up to do.

If thise deals would happen, it would follow Suncor Energy’s $20 billion takeover of rival Petro Canada, announced earlier this year.

So is M&A in the oil sector heating up? Maybe, but insiders warn that the fluctuations in oil and gas prices could slow the flow of deals.

Historically,  crude oil has tended to trade between 9 to 11 times natural gas prices.  But with crude at around $60 a barrel and natural gas at around $3.35 per million british thermal units, that ratio is currently 18 times natural gas prices.

That suggests gas prices will go up or crude prices will go down. If oil prices drop, then assets that on the market could be pulled, and the M&A market could cool fast.

* British private equity firm Silverfleet Capital has begun exclusive talks to buy German sausage maker Kalle Nalo from rival Montagu Private Equity, the Financial Times said.

* The world’s biggest mutual funds firm, Fidelity Investments, has sought potential candidates to succeed its president Rodger Lawson who rejoined the company in mid-2007, The Wall Street Journal reported.

* Four of the biggest names in the UK digital media scene are teaming up to launch an investment fund for internet start-ups, the Financial Times reported. Michael Birch, co-founder of Bebo, the social network acquired by AOL last year for $850 million, is the cornerstone investor. He is joined by Brent Hoberman, Peter Dubens and Jonathan Goodwin.

All the latest deal news can be found here.

The Thomson Reuters Investment Banking scorecard lands again. Here are the highlights:

BAAT Offers Largest Auto Loan Securitization of 2009

A US asset-backed offering fell among the top global debt deals of the week, as Bank of America Auto Trust (BAAT) offered a $3.9 billion TALF-eligible auto loan securitization, the largest such ABS offering this year.  In total, auto loan backed issues have accounted for 35.7% of US ABS, the largest share of the approximately $80 billion so far in 2009.

As a whole, securitizations are down 30% in the US and 39% globally over 2008 levels.  This week marks the third largest week for ABS activity in the US during 2009 with $9.7 billion of issuance.

Bankruptcy-related M&A at Five Year High

Five bankruptcy-related M&A deals were announced this week, including the acquisition of venture-backed public company Nanogen by French investment holding company Financiere Elitech for $25.7 million.  Year-to-date, 173 bankruptcy-related deals have been announced, the highest level since the same period of 2004 when there were 202.

In 2009 the most bankruptcy-related M&A deals have occurred in the Industrials sector with 23.1%, followed by the media and entertainment sector with 16.2%.  By nation, US targets represent 83 deals or 48.0% of bankruptcy M&A.

Singapore Company Follow-On Activity at Record High

Among the largest equity deals of the week was a $984.6 million follow-on offering by Singapore-based Neptune Orient Lines.  Year-to-date, Singapore follow-on volume totals $7.8 billion from 20 issues, nearly 11 times higher than the same period in 2008 when volume was $707.3 million and the highest year-to-date volume ever.  Total equity and equity related volume in Singapore is also at all-time record levels in 2009, reaching $8.1 billion.

Equity and equity related volume in Asia Pacific stands at $75.6 billion so far this year, a 6% decrease from last year.

Pain has to be shared but everyone has an interest in ensuring someone else takes more of that pain.

As a result, the larger and more complex a company’s debt structure, the more likely it is that restructuring the company’s debt will be a long and difficult process.

These are facts the management at British care home company Four Seasons Healthcare know all too well.

The company found itself loaded up with around 1.4 billion pounds of debt, split across 11 tranches and more than 30 lenders, via an ambitious securitisation at the top of the market in 2006.

But now, plunging property prices mean the owners of the company — the Qatar Investment Authority — and many of the debt holders are now “underwater”, unlikely to see much of a return on their investment.

A recent valuation estimated the company’s assets to be worth around 900 million pounds, while others suggest even this figure could be too high.

So the company has spent the last year attempting to restructure its debt. Twelve months later and still no deal is in place, despite the company reporting strong operating figures.

The problem is the scale of the debt reduction required — maybe approaching half a billion pounds — and the difficulties rounding up all the creditors behind a single deal.

On Monday creditors rejected the latest restructuring proposal to cut the company’s debts. Four Seasons responded by pushing forward their plan B: a sale of the company, managed by Deutsche.

Creditors knew that a sale process would begin if the restructuring deal did not go through, and worry that a sale would raise less than the restructuring proposal.

Buyers, including Advent (owner of Craegmoor, another care home company) and The Priory, have previously taken an interest and may see Four Seasons’ predicament as a great opportunity to buy a good business at a low price.

Do not write off a last-gasp restructuring deal, however. Swallowing pride and taking a big hit is not always easy, and often restructuring deals are wrapped up at the last possible moment. As a result, many predict another chapter or two in one of restructuring’s longest-running sagas.

Some corporate finance stories in the newspapers include:

* AIG (AIG.N) has resumed talks to sell its American Life Insurance Co unit to MetLife Inc (MET.N) in a deal that could help the stricken insurer raise more than $15 billion, according to the Financial Times.

* Datang Telecom (600198.SS) is in talks to sell a 20 percent stake to China’s national pension fund worth as much as 3 billion yuan ($428.6 million), China Daily reported.

* CIT Group (CIT.N), the U.S. commercial lender struggling to finance its business, is pressing U.S. regulators to allow it to issue government-backed bonds to allay concerns over its financial health, the Financial Times said.

* Xstrata’s proposed 40 billion-pound merger with Anglo American has effectively collapsed after Anglo’s shareholders rejected the approach, The Times reported.

* Metalloinvest, the Russian iron and steel firm founded by tycoon Alisher Usmanov, has agreed a four- to five-year extension with some creditors on repayment of $2.2 billion in debt, Vedomosti business daily reported.

Here are some other highlights from the interview that didn’t make it into the story:

ON EXELON’S NEW SYNERGY ESTIMATES

“If you’re only going to give our shareholders 18 percent of those synergies, that’s not so exciting. In most combinations, the synergies (are divided) more in the 50-50 range of whatever number… They claim there are like $3.2 billion of synergies. This is not a gotcha game. I’m not saying let me sit down with you and if you only prove $3 billion, I’ll say ‘Aha! You’re $200 million short.’ Fifty percent of $3 billion is much more than 18 percent of $3.2 billion.”

ON EXELON’S “BEST AND FINAL OFFER”

“What makes this deal unusual is that this is all a negotiation that is occurring in public. People making best and final offers and then coming back happens all the time in private negotiations.”

ON EXELON PLANS TO CUT NRG JOBS

“We have made it clear to every employee that this is a consolidating industry, we have a fiduciary duty to NRG shareholders, and that there is not a guarantee of permanent employment. Having said that … I definitely have concern about value creation tied with elimination of NRG jobs. People are not all fungible. The people that have created all this value at NRG and the people that are currently creating value in terms of the nuclear development and things like that are the very people that Exelon proposes to wipe out. You really can’t have it both ways. You can’t have full cost synergies by wiping out all of NRG’s corporate capabilities, but then say you’re going to take advantage of NRG’s growth opportunities. The people are the ones creating the growth opportunities and Exelon has a different type of person working there than the type of person working at NRG.”

NRG Energy rejected Exelon’s sweetened (and hostile) bid on Wednesday, saying the $6.9 billion offer was still too low.   

Exelon raised its all-stock offer for NRG by more than 12 percent last week, but investors have not been swayed by the increased price. NRG shares have lost more than 15 percent of their value since Exelon bumped up its bid.   

Exelon has said its increased bid of 0.545 of its shares for every NRG share is its best and final offer. 
Still, NRG called the revised Exelon bid a step in the right direction.  “If you would properly recognize the value created by NRG itself, you would be able to increase your current 0.545 offer by a substantial amount,” NRG wrote in its letter.   

Next stop on this long road: NRG’s annual meeting on July 21. Exelon has nominated a slate of directors to stand for election; shareholders will vote.

The two companies are part of a long list of running hostiles, including Broadcom/Emulex, Agirum/CF/Terra, Xstrata/Anglo American, Validus/IPC and EMC/Data Domain. Some of those offers are “unsolicited” and not “hostile” yet. But let’s face it — a bid that is unsolicited and perceived to be undervalued might not be “hostile,” but it isn’t considered particularly friendly.

Expect more unfriendly approaches as depressed stock prices and lack of long-term visibility continue to create wide - and often unbridegable - gaps between buyers and sellers.

Other corporate finance stories in the newspapers include:

* French water utility Veolia Environnement (VE.N) plans to sell a 30 percent stake in its Czech unit Dalkia, daily Hospdarske Noviny reported, citing Dalkia’s board chairman.

* The Russian government has reached a deal on the purchase of services conglomerate Sistema’s (SSAq.L) stake in telecoms giant Svyazinvest, Kommersant newspaper said.

For all the latest deals news, click here.