Ever wonder how General Motors is holding onto its top talent? 

After a traumatic bankruptcy and series of federal bailouts, the company still owes billions of dollars to the U.S. and Canadian governments. It lost $1.2 billion in its latest quarter, and only sees a slight uptick in auto sales next year.    

The days of banner-year profits and bonuses must seem far off for GM’s executives and finance staff.  GM’s Chairman has already said pay caps imposed on companies by the U.S. government’s pay czar make it tough to hire executives.

While other job opportunities are obviously limited in Detroit, and they may have nowhere better to go in the industry,  the company’s plans for a 2010 IPO has emerged as a key staff retention tool, one of its top executives said on Tuesday.

In comments to the Financial Executives International Current Financial Reporting Issues conference in New York, Nick Cyprus, vice president, controller and chief accounting officer at GM said:

“I have a tool that my peers don’t have. We have an IPO coming up in the next half-a-year to a year or whatever it takes. That’s a great tool, too. Getting the experience of taking General Motors public again is not only a great tool from an experience perspective and resume builder, but it’s also a great experience in that if things work out well there are potential wealth opportunities. In essence, the taxpayers get paid back and people who have delivered get an opportunity to make some money.”

GM  is planning to arrange a revolving line of credit in preparation for an eventual IPO, which would probably be one of the biggest in 2010 if it is able to keep up with its time schedule.

If you were a GM employee, or an investor for that matter, how excited would you be about this IPO?

The mid-size investment bank has named Kenneth Jacobs as CEO and chairman, reinforcing an institutional commitment to dealmaking since the death of legendary Wall Street wizard Bruce Wasserstein. Jacobs has been with the firm for more than two decades and touts an in-the-trenches approach to running the firm. He joined Lazard in 1988, was named a partner in 1991 and became deputy chairman in 2002.

Steven Golub, interim chief executive since Wasserstein’s death, will continue as Lazard vice chairman and chairman of its financial advisory group. Ashish Bhutani and Gary Parr will become directors and vice chairmen. Bhutani will continue as CEO of Lazard Asset Management. Parr is a deputy chairman. Steven Heyer, a director since Lazard’s initial public offering in 2005, will become lead director, a new board position.

While Jacobs’ ascension was widely anticipated, it will be interesting to see if other senior execs stay with the bank, given that the new boss is only 51 and will presumably be in the top spot for some time.

Ferrero — the maker of Nutella — might be considering an offer for an alliance with Cadbury, Il Sole 24 Ore says, saving the British group from Kraft’s clutches. Cadbury shares aren’t moving much, which says something about how the market sees the story. Elsewhere, Austria’s Erste Bank closed its rights issue late on Monday, with demand less than stellar.

The Lehman estate files its long-expected lawsuit against Barclays Capital, according to court documents. And with UBS’s investor day and the Euro Finance Week conference in Frankfurt on elsewhere, all eyes are on Europe’s banks again.

For all other Reuters stories about deals, click here.

Announcing a third-quarter operating loss, the government-owned automaker said it would begin paying down its $6.7 billion debt to the U.S. government ahead of schedule. Most financial experts would agree that paying off debt is a good thing.

The government extended almost $50 billion in financing to GM but agreed to convert most of that into a 61 percent equity stake in the automaker. A congressional oversight panel said the government was unlikely to recover all of the financing it provided GM.

Banks that paid off their government bailouts early were able to shrug the pay czar off their backs and return to the time-honored practice of paying their executives whatever they pleased. It’s unclear whether GM will be able to do the same once it pays off the government. After all, taxpayers will still be majority shareholders after all debts are paid. Ken Feinberg may well wind up with a desk at GM’s HR office.

So why pay this money back before it is due? It’s not as if the prepayment is being funded from genuine earnings. In effect, GM is using money borrowed from taxpayers to pay them back. With expectations so low, and markets gradually accepting that the worst may be behind it, is this trip really necessary?

Cisco says more than 40 percent of Tandberg shareholders are backing its bid for the Norwegian group now that Cisco has raised its offer to value the group at $3.4 billion.

Canon plans to buy Dutch copier and printer maker Oce for $1.1 billion. For these, and other merger Monday stories, click here.

And here’s what we found of interest in other media.

U.S. investment bank J.P. Morgan will offer 500 to 525 pence per share to buy out the 50 percent stake it does not already own in its UK stockbroker joint venture with Cazenove, according to media reports, such as in the Financial Times.

UC RUSAL, the world’s largest aluminium producer, is close to a deal to restructure $7.4 billion in debt to foreign banks which is crucial for the Russian firm’s planned $2 billion IPO in December, the Wall Street Journal says.

Jaguar Land Rover is expected to announce today that it has secured a 170 million-pound ($282.5 million) working capital facility from GE Capital, according to the Financial Times.

Germany’s largest steelmaker ThyssenKrupp has sold its U.S. scaffolding unit Safway to Odyssey Investment Partners for an undisclosed price, Handelsblatt newspaper reports.

Highlights from this week’s Thomson Reuters Investment Banking scorecard:

ASIA PACIFIC IPOs UP 65%
Malaysian telecommunications provider, Maxis Bhd, raised $3.3 billion in an initial public offering this week, the biggest IPO from a Malaysian issuer on record.  Asia Pacific offerings account for 59% of global IPO activity this year and total $49.2 billion for year-to-date 2009, a 65% increase over last year at this time.
In Asia, China International Capital Co, CITIC and UBS account for nearly 35% of overall IPO activity, by proceeds, this year while Morgan Stanley has lead managed the most offerings in the region, with 14.

AUSTRALIAN M&A TOTALS $130.9 BILLION
Australian target M&A activity totals $130.9 billion for year-to-date 2009, a 58% increase over the year ago period.  Deal activity in the materials, financial and industrial sectors accounts for nearly 80% of overall activity.
A bid for Melbourne-based Transurban Group, an operator and developer of electronic tolling systems by an investor group comprised of Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan for $8.9 billion topped the list of biggest deals this week.

HIGH TECH CORPORATE DEBT UP 34%
This week’s $4.9 billion bond offering from Cisco Systems brings year-to-date corporate debt volume in the high tech sector to $56.9 billion, a 34% increase over last year.  Ranking as the largest US high tech bond for year-to-date 2009, it also marks Cisco’s second debt offering this year.
As the global credit markets have rebounded this year, a number of high technology names have stepped into the bond market with multi-billion offerings including Hewlett-Packard, Oracle, Microsoft and IBM.

British Airways and Iberia finally agree to a merger that will create the world’s no. 3 airline by revenue. The all-stock deal, giving BA shareholders about 55 percent of the combined company, is just the (airline) ticket for the columnists: it’s cleared for takeoff after a long time on the runway and so on.

Alistair Osborne in the Telegraph says on “pure current valuation grounds, it’s not an amazing deal for BA. But strategically it presses most buttons – and there’s plenty of extra value to come from the mooted €400m of synergies, which are bound to prove an undershoot.”

Nils Pratley in the Guardian says the deal is not a glorious victory for BA, which still faces big challenges in both short- and long-haul business. While the deal is “significant, BA’s more important proposed deal is probably the attempt to secure anti-trust immunity for an alliance with American Airlines.”

David Wighton in the Times cautions that “stapling together two loss-making airlines does not guarantee that both will improve” and wonders if it will lead to improved service at Iberia or worse service at BA.

Meanwhile, FT Alphaville breaks down the key terms of the memorandum of understanding.

For more coverage on this, and the rest of the latest deals news from Reuters, click here.

In the newspapers:

* Lloyds Banking Group (LLOY.L) has more than 700 million pounds ($1.2 billion) of debts and investments tied up in Kenmore Property, the London Times says.

* Standard Chartered (STAN.L) (2888.HK) expects to list on the Indian bourse by April next year depending on market conditions, the Economic Times reported, citing the bank’s group chief executive. Reuters story here.

* Germany’s Allianz SE (ALVG.DE) and MAN SE (MANG.DE) will pay off the remaining debt owed by their jointly owned printing press subsidiary, manroland, according to the Frankfurter Allgemeine Zeitung. Reuters story here.

* The Interac Association, which processes most debit-card transactions in Canada, has hired JPMorgan to help it restructure into a for-profit company, should regulators allow, the Globe and Mail newspaper says.

One public-relations lesson for Bank of America <BAC.N> after a year of crisis and a pummelling in the court of public opinion: Don’t always listen to the lawyers.
That’s the word from James Mahoney, director of communication and public policy at the country’s largest bank.
B of A has taken a beating over everything from its pay scale and lending practices to the fees it charges consumers.
It’s humbling for the institution that a year ago was the country’s “leading bank,” Mahoney told a trade conference sponsored by by Financial Research Corp of Boston.
“Two words emerged: bonus and bailout. It’s been all downhill ever since.”
He said the bank’s lawyers barred it from offering a single narrative on the decisions leading up to its takeover of the investment bank Merrill Lynch at the height of the financial crisis just over a year ago.
The lawyers fretted that executives might stray from the script during any future depositions to investigators, Mahoney said. But that left B of A exposed to a lot of attacks and with no easy way to protect its flank.
The lesson? “Don’t listen to lawyers if you’re trying too manage the public reaction.”
Mahoney had a receptive audience for a rare peek under the hood at the bank’s rough year.
While B of A sorts out its leadership with the pending departure of longtime chief executive Ken Lewis, Mahoney’s said the bank has taken more than its share of PR black eyes because of its size.
“I think we really became the target of a lot of the anger that’s out there because (the bank) is a highly visible, convenient place to vent,” he said.
(Reporting by Ross Kerber)

A large Ernst & Young (E&Y) survey finds plenty of appetite for acquisitions, but also finds many companies feel constrained in their dealmaking, and one in 25 is simply “focused on survival”:

“Most companies believe the time is ripe for deals, but only one third have the strength and agility to snap up “once-in-a-lifetime” acquisition opportunities in the wake of the credit crisis, according to a global survey.

Ernst & Young, which quizzed 490 top executives from “major industry players” across 32 countries, said 33 percent were likely or highly likely to buy firms in the next 12 months, with 25 percent expecting to bid in the next six months. There were no data on the size of possible targets.”

For the full Reuters story, click here.

Hewlett-Packard’s move into the network equipment market with a $3.1 billion deal for 3Com could be marred by allegations of insider trading. At first glance, the hallmarks of suspicious trading are there, according to option traders said. 3Com shares jumped 5.18 percent to $5.69 during the day — before the deal was announced — rising from the opening bell and closing a penny off the session high.

After the bell, when the deal was disclosed, 3Com shares shot up 35 percent to $7.65. Option market sources told our reporter Doris Frankel it wasn’t just the stock behaving oddly ahead of the late-afternoon news. Volume in 3Com call options — which convey the right to buy the company’s shares at a fixed price within a specified time period — soared.

A total of 8,085 calls traded, against only six puts. That amounted to 17 times the recent average daily call volume, according to option analytics firm Trade Alert.

“The rise in 3Com shares and a surge in call volume before the takeover announcement tell us that somebody’s timing was extremely good,” said Jon Najarian, co-founder of optionMonster, a Web information site. “Since I do not believe in coincidences on Wall Street, I would bet that these unusual call option trades will spark an investigation.”

The Securities and Exchange Commission, which looks into unusual options and share trading activity, was closed on Wednesday for the U.S. Veterans Day holiday. Expect it to be busy today.