A man browses web at an Internet cafe in MadridWith tens of billions in the bank collecting dust since its failed bid for Yahoo, and the elusive promise of the Internet still beckoning, Microsoft returned to the market for Internet search businesses with a $486 million purchase of Greenfield Online, the U.S.-listed owner of European price comparison website ciao.com. The buy is meant to help lift Microsoft out of fifth place in the European search market by giving a boost to its Live Search platform. Google‘s monster lead in the search market is a whopping 62 percent and 79 percent in Europe, according to the most recent data published by Web usage tracker ComScore. Microsoft has a 2 percent market share in Europe and 9 percent worldwide, behind both Google and Yahoo. In Europe, Microsoft is also outranked by online auction site eBay and Russia’s Yandex.

Four large hedge funds, all Huntsman shareholders, have proposed a plan to finance at least $500 million of the $6.5 billion buyout of the chemical company by a unit of Apollo Global Management. Hedge funds Citadel Investment Group, D.E. Shaw & Co, MatlinPatterson Global Advisers and Pentwater Growth Fund, and as of this morning, the Huntsman family, have agreed to team up on the financing plan, but Apollo’s Hexion Specialty Chemicals unit rejected the plan last night, saying Huntsman’s increased debt and decreased earnings since the deal was struck in July 2007 would no longer make a combined company solvent. “We are not seeking to renegotiate this transaction,” Hexion responded in a statement. “We are seeking to terminate it, and obtain judicial confirmation that Hexion has no obligation to pursue the acquisition or to pay Huntsman a termination fee.”

Allianz is set to sell Dresdner Bank to Commerzbank, sources with direct knowledge of the matter say, in a deal that will fuse Germany’s second- and third-biggest lenders. The deal, to be announced as soon as this weekend, will see Commerzbank take a 51 percent stake in Dresdner and buy the rest later, the sources said. Taking over Dresdner, which analysts estimate to be worth about 9 billion euros ($13 billion), will create a group to rival flagship lender Deutsche Bank and change the face of banking in Germany, Europe’s biggest economy. It will give Commerzbank a badly needed leg up in its home market, which is dominated by state not-for-profit lenders and allow Allianz to end an unhappy marriage that unsuccessfully tried to match investment bankers with insurance salesmen. The deal is likely to result in heavy job cuts, which would have been avoided had Allianz chosen to sell to another would-be buyer, China Development Bank.

Bain Capital and Carlyle Group are among the private equity firms through to the next round of bidding for a stake in the telecom unit being spun out of Hong Kong’s PCCW, according to sources. A deal, expected to come late this year, could fetch $2.5 billion. Two sources involved in the deal said Goldman Sachs‘s private equity arm was considering joining TPG Capital in its own offer for the unit, though they could not confirm that the two had officially linked up. Sources also said Apax Partners moved into the next round of bids, due in mid to late October. PCCW, Hong Kong’s former monopoly fixed-line carrier, said in May it planned to fold its core media and telecoms businesses into a separate firm called HKT and sell 45 percent of the new company. At the time, PCCW shares had dropped 90 percent since 2000.

U.S. private equity firm Carlyle Group is seeking a new investor for Willcom, a Japanese mobile phone operator needing $1.8 billion to develop new technology services, four people familiar with the matter said. Carlyle, which owns 60 percent of unlisted Willcom, has hired Merrill Lynch, to find an investor to purchase new shares in Willcom, they said, asking not to be identified because the information is not public. Carlyle is also willing to sell part of its stake, the financial sources said. Electronic parts maker Kyocera owns 30 percent of Willcom and KDDI holds 10 percent. Willcom said in November it would need the money by the end of 2015 to develop new PHS technology to better compete against NTT DoCoMo, KDDI and Softbank. In December, it won one of two licenses from the government to provide next-generation wireless Internet access.