Derisory (di-ry-ser-i) adj. deserving derision; too insignificant for serious consideration.

In lambasting a formal takeover offer from Kraft as “derisory”, Cadbury Chairman Roger Carr has both ratcheted up the rhetoric (an earlier letter to Kraft did not use this term) and struck a tone familiar to connoisseurs of bid battles. Carr, of course, is a veteran dealmaker himself.

UK targets have often found rejecting an approach as “derisory” is just scornful enough, without incurring the wrath of the Takeover Panel. Other approaches to have met with the same brushoff include Macquarie’s 2005 hostile bid for the London Stock Exchange and BHP Billiton’s epic tilt at rival miner Rio Tinto.  Over in Ireland, Aer Lingus has decried the advances of budget archrival Ryanair in exactly the same manner.

Still, a bit of bluster doesn’t mean a deal can’t eventually be done at whatever the opposite of a “derisory” price is. WPP, for example, eventually won over market researcher TNS, and brewer Scottish & Newcastle finally melted into the arms of Heineken and Carlsberg.

Kraft’s offer is actually worth less than an initial informal approach because its stock has fallen in the meantime. Monday’s move certainly hasn’t impressed Reuters columnist Neil Collins, who says Kraft CEO Irene Rosenfeld has “pressed the snooze button”.

In Monday’s DealZone Daily: French insurer AXA sets its sights on Asian growth. Meanwhile, General Electric Co. and Comcast Corp agree on a valuation of around $30 billion for a joint venture between NBC Universal and Comcast, ironing out what has been a key obstacle in talks so far, a source familiar with the matter says.

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

And in the newspapers:

* Indian energy giant Reliance Industries (RELI.BO) is close to a nearly $6 billion overseas acquisition and the likely target is the assets of petrochemicals firm LyondellBasell, the Economic Times reported, citing an unidentified banker.

* NYSE Euronext (NYX.N)(NYX.PA), parent of the New York Stock Exchange, has expressed strong interest in a China listing as the country prepares to allow for such listings, Hong Kong media reported. Reuters story here.

* Sprint Nextel Corp (S.N). is preparing to pump at least $1 billion more into Clearwire Corp., the Wall Street Journal reported, citing two people familiar with the matter.

* Private equity fund CVC has pulled out of talks with General Electric (GE.N) about a possible joint bid for the power and transmission unit of France’s Areva (CEPFi.PA), a French financial news service reported on Sunday. Reuters story here.

* Tobacco giant Reynolds American Inc (RAI.N) is in advanced talks to buy a Swedish maker of products that help people stop smoking, the Wall Street Journal reported.

Highlights from Thomson Reuters data on mid-market (sub-$500 milion) deals. For October in European, the Middle East and Africa (EMEA):

· Average bid premium four weeks prior to announcement increased on average across sectors in EMEA year to date compared to same period in 2008 by 2% with bid premia rising slightly with half the sector showing an increase and half decreasing.

· Year on year Average Rank Value to EBITDA however decreased by 16% on average with only the Real Estate and Materials sectors increasing.

· JP Morgan top the European Mid-Market M&A rankings YTD, up from third position for same period 2008

· EMEA Mid-Market M&A from January to end of October down 49.6% compared to same period last year, to US$110.2bn from US$218.8bn.

· EMEA Mid-Market M&A activity for October at US$12.2bn, down 12% from September’s US$13.9bn, but down 34.9% compared to October 2008 which stood at US$18.7bn.

Sector coverage:

· EMEA High Technology US$865m for October down 60% from US$2.2bn in October 2008.

· EMEA Media & Entertainment US$165m for October down 86% from US$1.2bn in October 2008.

· EMEA Telecommunications US$219m for October down 79% from US$1.1bn in October 2008

Global Mid-Market deal activity for October at US$46.8bn from 2,864 deals, down 11% from US$52.7bn from 3,207 deals in September but only slightly down compared to same month previous year from US$48.5bn.

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

BERKSHIRE HATHAWAY’S BIGGEST DEAL
Berkshire Hathaway’s $35.9 billion bid for the remaining share capital of Burlington Northern Santa Fe, ranked as the fourth biggest M&A deal this year in the United States and the largest acquisition for Berkshire Hathaway on record.
Since 1980, Berkshire Hathaway and its subsidiaries have announced nearly 200 acquisitions, with 43% of those deals in the industrials sector, 34% in the financials sector and 12% in energy & power.   Just over 90% of the acquisitions announced by Berkshire Hathaway have been based in the United States.

IMS HEALTH IN LARGEST BUYOUT SINCE 2007
IMS Health agreed to be acquired by TPG and the investment board of the Canada Pension Plan for $5.2 billion, marking the largest leveraged buyout in the United States since the $27 billion buyout of Hilton Hotels in July 2007.
Eight investment banks provided financial advisory services to IMS and the private equity consortium, including Evercore Partners which currently ranks fourth for year-to-date M&A in the United States, up from 16th last year at this time.

JAPANESE M&A UP 41% OVER 2008
This week’s $11.3 billion merger of Nippon Oil Corp and Nippon Mining Holdings Inc brings the volume of Japanese target M&A to $90.1 billion for year-to-date 2009, a 41% increase over 2008 levels and one of the few regions to see year-over-year M&A growth.
Merger activity in the Japanese financial sector accounts for 38% of year-to-date activity, followed by high technology and real estate with 17.1% and 13.3% respectively.  Energy & power mergers account for 13.0% of announced volume this year, nearly three times last year’s total.

Like UBS and Societe Generale, Deutsche Bank’s researchers are now forecasting a resurgence in M&A and say investors should “prepare to ride the wave”.

They concede that “picking actual as opposed to potential M&A targets is a notoriously difficult exercise” but have come up with 30 potential European targets, based on strategic and financial criteria. While bank lending remains a problem, they say that is not always an insurmountable hurdle, and should spur more stock-based deals (see graph below).

In a note dated Nov. 4, the DB team writes:

“Following two years of below-normal levels of merger and acquisition (M&A) activity in Europe, we believe the conditions are in place for deals to return to the fore as a major driver of returns: Public markets are well and truly open for financing, low organic growth should spur expansion by acquisition, rising equity markets and sub-peak valuations make stock an attractive acquisition currency, and confidence is returning to boardrooms and executive offices.”

Here are their 30 top targets:

Maybe it’s time to add a new weapon to the old M&A arsenal of poison pills, dawn raids, and white knights — the corporate blog. You could call it the WordPress Hug.

Late on Monday, Cisco’s Ned Hooper used the company’s blog to insist it had offered “a very good price” for Tandberg, after some shareholders of the Norwegian videoconferencing company said the price was too low. (See his full post here.)

The “Driving Conversations” blog of General Motors Europe has also been a source of news on the long-running (and now abandoned) talks to sell Opel, hosting posts from GM’s chief negotiator, John Smith. (See some of his posts on the topic here.)

So could blogging become a major channel of communication on M&A transactions? Big corporations have enthusiastically adopted it for other uses- for example, “Randy’s Journal”, a Boeing blog, has a following in the industry and among aeroplane enthusiasts.

But it is hard to believe this trend would be welcomed by some financial regulators — like the UK’s Takeover Panel, which banned advertising during takeover battles more than 20 years ago.

Mergers and acquisitions activity may be predicted to increase over the next year but in the short-term it may provide another reason for deals to be postponed. Just ask General Motors.

Other deals news in the media on Thursday:

* An investment company controlled by the Shanghai city government will own a majority stake in a planned Disney theme park that won key government approval this week, the People’s Daily reported on Thursday.

* Scripps Networks (SNI.N) is close to an agreement to acquire a majority stake in the Travel Channel from Cox Communications, the nation’s third-largest cable company, the DealBook blog reported on Wednesday.

* British real estate developer Quintain Estates and Development (QED.L) is set to launch a 180 million pound ($296.5 million) rights issue on Thursday, the Daily Telegraph reported.

* In the latest twist in a takeover battle running since January, Canadian fertilizer maker Agrium Inc (AGU.TO) is planning to make a final offer for CF Industries Holdings Inc (CF.N) on Thursday, the Wall Street Journal said, citing people familiar with the matter.

Deloitte’s Energy and Resources group says M&A in these sectors could return to “pre-recession levels” by 2011. In particular, it says the rise of big state-backed rivals is putting pressure on large mining groups, in much the same way Big Oil came under pressure a decade ago. From the group’s 2010 predictions report:

“During 2009, mining M&A has been led by the junior or mid-level players, which have to consolidate if they want to stay alive and not be swallowed up by the bigger firms. Indeed, many anticipate that the mining sector will continue to consolidate until there are a handful of supermajor firms like there are in oil & gas.

“Large mining companies will increasingly need to buy rivals and subsequently sell off assets to gain synergies if they are to compete with state-owned companies, particularly those from China.

“These conditions mirror those encountered by large oil companies a decade ago, when massive consolidation swept the industry in response to the rise of national oil companies (NOCs) such as Saudi Aramco, Gazprom,Petrobras, and others.”

But what are the deals? Anglo-Xstrata is off (for now), as is BHP-Rio. Maybe it’s just a matter of time. Anyhow, in oil and power the team say:

“Apart from the oil supermajors, consolidation will be likely across sectors. Oil & gas independents will be possible targets for reserve-hungry majors but also potential beneficiaries of portfolio rationalization among larger players.

“Power and utility companies will likely look at M&A activity to bolster their strategic positions, provide access to markets, and to raise cash for capital improvements.”

Get the full report here.

It looks like Kraft CEO Irene Rosenfeld is getting ready to play hardball with her reluctant target, British chocolate maker Cadbury.

Cadbury investor Mario Gabelli will be disappointed in the short term - he wanted a small kiss from Irene after all - but a formal offer from the North American food group sets in motion an 88-day process under UK takeover rules.

That should give Kraft plenty of time to sweeten its offer to something starting with an eight - the 800p per share bar regarded by many as the minimum price needed to tempt Cadbury to the negotiating table.

Kraft is expected to post earnings of 48 cents a share for the third-quarter, up from 44 cents a year earlier, according to analysts’ estimates, and good results are expected to strengthen its hand in the ensuing battle with Cadbury.

It’s time for those high-profile bankers working for Cadbury to start sharpening the defence. It’s backed by the trio that ran last year’s demerger of its U.S. softs drinks business, as I wrote earlier here.

Like SocGen before them, UBS strategists are looking forward to a pickup in M&A next year.

From a note published on Monday:

“We expect 2009 to mark the trough in global M&A transactions and for activity to pick up in 2010 and beyond. For FY2010, globally we expect M&A activity in the region of $2.5-2.7trl, an increase of 15% on current annualised run rate for 2009 and close to levels last seen in mid 2004-05. The biggest driver of an increase in activity is likely to be the increase in risk appetite in equity markets and in the boardroom, a return to earnings growth and profitability by World Inc and a backlog of pending asset disposals.”

“Credit conditions are also supportive and we expect private equity and bank lending to pick up at some point next year.”

“We do think investors can take advantage of the growing interest in M&A as the likelihood of deals gets priced into stocks. The average take-out premium historically has been 30-40%, much of which is earned around the announcement of a deal. Merger arbitrage post bid announcement has earned a levered IRR around of 9% this year.”

“Despite a 27% decline in global M&A activity in 2009, deal volumes in Asia remained strong. At the current run rate, 2009 activity in the region will be up on 2008, taking APAC’s share of global M&A to 25%, from 6% in 1995. A meaningful pick-up in global activity in 2010 will require a rebound from trough deal volumes this year in the Americas and Europe.”

“M&A activity could be especially prevalent in the Financials and Healthcare sector due to the shock of increased regulation affecting their industry dynamics. The Healthcare sector, along with Technology is one of the best placed sectors from a balance sheet point of view too, generating high free cash flow and with limited debt on the balance sheet (or net cash in the case of Tech). Asset disposals at the Industrials and Materials sectors could be a theme if excess capacity pressures intensify.”

Despite a dismal couple of years for M&A, the strategists also say there has been a longer-term shift to a higher “natural rate” of mergers than in previous eras (see graph), as dealmaking benefits from globalisation, deregulation, privatisation and the development of financing markets.